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Kiwi Pressured As RBNZ Signal Rates Peak After 25bp Hike

FOREX

Kiwi is pressured in Asia today as the RBNZ hiked rates 25bps to 5.50%. The bank stated the cash rate is now likely at its peak (5.50% post today's outcome), the market was expecting a peak of close to 6% before the meeting.

  • NZD/USD prints at $0.6170/80 and is down ~1.2%. Support at $0.6182 (low from May 11) has been broken, on the downside the next support level is low from 26 April at $0.6112. AUD/NZD is ~1% firmer, the cross has broken the 20-Day EMA ($1.0668). The next upside target for bulls is the 200-Day EMA.
  • AUD was pressured on spillover from the move in NZD however support was seen below $0.6590 and losses were pared. AUD/USD sits a touch above $0.66. Early in the session the Westpac Leading Index for April fell -0.03%.
  • Yen is a touch firmer, USD/JPY is down ~0.1%. Ranges have been narrow with little follow through on moves.
  • Elsewhere in G-10 EUR and GBP are a touch firmer.
  • Cross asset wise; BBDXY is down ~0.1% and e-minis are ~0.1% firmer. 2 Year US Treasury Yields are ~2bps lower.
  • On the docket today we have UK CPI & PPI and the minutes from the May FOMC meeting.
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