The Kiwi pair rose somewhat on Wednesday morning after the Reserve Bank of New Zealand posted its interest rate decision. It is now trading at around 0.676, which is the highest it has been since January 20th. It has risen by about 3.60% from the lowest level this year.
The New Zealand economy is performing well as demand from the country rises. Recent economic data shows that most sectors are doing well. For example, the unemployment rate has fallen to pre-pandemic levels while retail sales have kept rising.
Meanwhile, the manufacturing and services sectors are doing great as evidenced by the recent PMI numbers. The situation will become much better when the country reopens its borders in the coming weeks. Nevertheless, like in most countries, inflationary weights remain in New Zealand as the cost of energy rises.
The RBNZ concluded the meeting on Wednesday morning and delivered a hawkish decision. It decided to raise interest rate for the third straight month. Therefore, the headline rate has moved to 1%, the highest level since the pandemic started.
The RBNZ decision was hawkish but the movement of the Kiwi pair was a bit mild. That was because the decision was in line with what analysts were expecting. We are expecting for the pair to raise further.
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