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In view of Imre Speizer, Research Analyst at Westpac, NZD/USD has had a good run in November, rising almost 4c since the Oct low of 0.6425. Some of that is due to a strong run of economic data (GDP, CPI, jobs), which in turn has raised market expectations of the OCR.

Key Quotes

“Market pricing for the OCR has now removed any chance of a near-term rate cut, and is slightly more hawkish than the RBNZ’s own OCR forecast which was kept unchanged at today’s MPS.”

“We suspect market pricing will drift a little higher near term, but will be restrained by the RBNZ’s implicit signal that it will tolerate abovetarget inflation.”

“The more upbeat RBNZ adds to the case for a decent short squeeze over the next few weeks, 0.6850 the next upside target.”