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Kiwi slips as traders cut odds of an RBNZ October rate hike
Traders now see the RBNZ raising the Official Cash Rate to 3% on October 28 with about a 58% chance, down from roughly 80% late September.
FXStreet reports traders are trimming expectations for the Reserve Bank of New Zealand, with about a 58% chance of a hike to 3% on October 28, down from around 80% in late September.
With those odds fading, NZD/USD has dropped and was trading just above 0.5600, after Tuesday marked the first session high above 0.5600 since September 28.
FXStreet adds that the RBNZ’s September forecast showed an average OCR of 2.81% for the December quarter, a path that would require no October move and a hike in December, which traders have been drifting toward again.
The report also notes BNZ estimates the Kiwi’s fall adds about 0.3 percentage points to its inflation forecast, while the RBNZ’s own trade-weighted index sits at a 15-year low, with an October move and an OCR reaching 3.75% by then now expected.