Credit Agricole CIB Research discusses NZD look in light of the RBNZ August policy decision.
"The RBNZ surprised us as well as the market by leaving its OCR unchanged at 0.25%. We had been looking for a 25bp rate hike. It was a hawkish hold by the RBNZ, however, with the central bank strongly outlining the reasons to reduce stimulus by raising rates...The RBNZ’s hawkish MPS was followed by a hawkish press conference by RBNZ Governor, Adrian Orr.," CACIB notes.
"We continue to expect rates to go higher in NZ and NZD appreciation in the coming months and seethe on-hold decision as a chance to buy the currency. The risk on this front is the potential for the current Covid cases in NZ to expand into a full-blown outbreak and lead to longer lockdowns and further delays to raising rates," CACIB adds.