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NZD/USD Looks Below $0.7000

NZD

The broader USD strength in play since Wednesday's firmer than expected U.S. CPI readings has allowed NZD/USD to push lower, with the rate now having a look below $0.7000, registering a low of $0.6997 thus far. Initial support is now located at the Oct 4 high ($0.6982). Below there, bears would look to the 61.8% retracement of the Aug 20-Oct 21 rally ($0.6963).

  • Looking ahead, RBNZ rate hikes remain well and truly baked in over the immediate term. The OIS strip prices in 35bp of tightening at the Bank's Nov meeting, or a 40% chance of a 50bp hike (that may be a little aggressive given previous RBNZ rhetoric), but it will likely be the hikes delivered over the medium term that helps shape relative NZD performance (~175bp of tightening is currently priced between now and the end of the Bank's Oct'22 meeting).
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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