ANZ: NZD to be overly sensitive to RBNZ rate decision and tone

Even if some of the idiosyncratic factors behind the dollar’s rally in 2022 have faded, if nothing else, last week’s rally is a timely reminder that the dollar’s decline cannot be taken for granted, especially if The Fed continues to play a leading role in addressing inflation.

But this week the focus is on the RBNZ and the debate over whether Hurricane Gabriel will or should alter its official cash rate (OCR) decision (consensus of analysts and market pricing still sees the Fed raising rates by 50bps). NZD/USD is expected to be overly sensitive to RBNZ decisions and tone.