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As had been widely expected, the Reserve Bank of New Zealand raised its interest rate by a strong 0.75%, taking its official cash rate to 4.25%, the highest seen since 2008 and the highest rate of any major currency. The RBNZ also increased its forecast of its maximum OCR in the near term to 5.50% in 2023, while also forecasting a year-long recession which will begin in the middle of 2023.
The RBNZ has never made a hike of 0.75% before. Overall, this is seen as
a bit of a hawkish tilt
and seems to have spurred the Kiwi to minor gains against the Australian Dollar in
the aud/nzd currency cross
(which has reached its lowest level since March), and against the Japanese Yen in
the nzd/jpy cross . Minutes of the most recent FOMC meeting will be released later today. There will be releases today of manufacturing and services PMI data from the UK, Germany, and France. In the Forex market,
the New Zealand Dollar is the strongest major currency over the short-term, while the Japanese Yen and the Australian Dollar are the weakest. Daily new global coronavirus cases
remained steady last week, maintaining a downwards trend which began last July. It is estimated that 68.4% of the world's population has received at least one dose of a coronavirus vaccination. Total confirmed new coronavirus cases worldwide stand at over 643.9
million with an average case fatality rate of 1.03%.
The rate of new coronavirus infections appears to now be significantly increasing
only
in
China, Japan, the Solomon Islands, and Venezuela.
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