NZD/USD Jumps Ahead Of RBNZ Decision, Market Mixed On Decision

The NZD/USD advanced 0.95% on Tuesday, and now trades at it highest level in about a month, as a softer-than-expected US PPI reading caused weakness in the USD and investors position ahead of the RBNZ meeting later today.

• The NZD/USD hit a high of 0.6082 late into the overnight session, before some slight selling into the close, the currency now trades about 3.70% higher than lows made late July.
• After Tuesday's rally, the pair now trades above all key moving averages, with other technical indictors showing that the market is bullish, with the 14-day RSI at 61, while the MACD is showing increasing green bars.
• Initial support is 0.6020 (Aug 13 lows), with a break here opening a move to 0.6005 (20-day EMA). A break above the overnight & monthly highs of 0.6085, would open a move to retests 0.6100 (round number) and then the July highs of 0.6154 (July 8th)
• RBNZ dated OIS is pricing in a 67% chance of a cut today, up slightly from 64% on Monday and is pricing 89.5bps of cuts heading into year-end meeting in November.
• MNI RBNZ Preview – August 2024: Close Call, August Communication Opportunity - (See link)
• The NZ-US 2yr swap spread was 10bps higher on Tuesday, rising to 21.5bps
• Expiries: 0.6090 (NZD958.1m), 0.5240 (NZD360m), 0.6000 (NZD308.5m), for Aug 14th NY Cut
• Today, we have RBNZ rate decision at 12:00 AEST followed by the RBNZ Gov new conference at 13:00 AEST