Via KiwiBank.
The RBNZ is widely expected to lift the cash rate at every opportunity this year (seven meetings). We expect the RBNZ to hike in 25bps increments, to take the cash rate to 2.5% by November.
But with the RBNZ following a near fully priced path of rate hikes this year. the Kiwi flyer may struggle to find its wings and appreciate. In fact, risks may be titled to the downside as offshore central banks play catch up and interest rate differentials begin to narrow.
There's downside for the Kiwi Aussie cross (NZDAUD), as rising and broadening inflation tests the RBA's patience.
Signalling a higher OCR track at the February MPS might give the Kiwi a much-needed boost.
---
On the session here today to open the week the NZD has been at the softer end of the spectrum:
