13 Feb 2014
Flash: RBNZ expected to hike rates by 200 bp - BNZ
FXStreet (Bali) - According to Kymberly Martin, Strategist at Bank of New Zealand, the RBNZ is expected to raise rates by at least 200bps over the next two years.
Key Quotes
"We believe the RBNZ will harbour no fundamental concern with being at the forefront of the global tightening cycle. Historical precedents are in place. Furthermore - and most importantly - the RBNZ can no longer ignore domestic fundamentals."
"Concerns that a higher NZD will be the ‘release valve’ as the OCR rises are likely misplaced. Indeed, if current market expectations for NZ and US rates are met, all else being equal, the NZD/USD ‘fair value’ would fall from current levels by year-end. We forecast the NZD/USD at 0.7700 at year-end."
Key Quotes
"We believe the RBNZ will harbour no fundamental concern with being at the forefront of the global tightening cycle. Historical precedents are in place. Furthermore - and most importantly - the RBNZ can no longer ignore domestic fundamentals."
"Concerns that a higher NZD will be the ‘release valve’ as the OCR rises are likely misplaced. Indeed, if current market expectations for NZ and US rates are met, all else being equal, the NZD/USD ‘fair value’ would fall from current levels by year-end. We forecast the NZD/USD at 0.7700 at year-end."