New Zealand Dollar Higher As RBNZ Raises Rate By Record 75 Bps

(RTTNews) - The New Zealand dollar was higher against its major counterparts in the European session on Wednesday, as the Reserve Bank of New Zealand raised the benchmark rate by a record 75 basis points and signaled more tightening ahead to bring inflation down.

The Monetary Policy Committee of the RBNZ decided to raise the Official Cash Rate to 4.25 percent from 3.50 percent.

"The Committee remains resolute in achieving the Monetary Policy Remit," Governor Adrian Orr said.

In order to bring inflation back to the target, the committee said the interest rate needs to reach a higher level, and sooner than previously suggested.

At the meeting, members discussed an even bigger reduction of 100 basis points. The bank now expects the official interest rate to peak at 5.5 percent in 2023 compared to the previous outlook of 4.1 percent.

The NZD/USD pair touched a 5-day high of 0.6198. If the kiwi rises further, it may find resistance around the 0.64 level.

The NZD/JPY pair firmed to more than a 2-month high of 87.46, after having dropped to a 2-day low of 86.40 at 8 pm ET. The currency may face resistance around the 91.00 area.

The kiwi rose back to 1.0754 against the aussie, not far from nearly an 8-month high of 1.0749 seen at 8:10 pm ET. The kiwi is likely to challenge resistance around the 1.06 level.

The kiwi remained firm at 1.6675 against the euro. It has touched more than a 2-month high of 1.6648 at 8:10 pm ET. On the upside, 1.06 is likely seen as its next resistance level.

Looking ahead, U.S. weekly jobless claims for the week ended November 19, University of Michigan's final consumer sentiment index for November and new home sales and durable goods orders for October will be released in the New York session.

The Fed minutes from the November 1-2 meeting are set for release at 2:00 pm ET.