NZD/USD jumps after RBNZ rate hike

"Invest in yourself as much as you can; you are your own biggest asset by far." - Warren Buffett

 

 

HEADLINES

 

 

• New Zealand dollar jumps as RBNZ flags more hikes ahead
• Dollar dips in choppy trade as investors weigh Ukraine scenarios
• Gold flat as higher U.S. yields counter safe-haven bids
• Oil pulls back on view western sanctions on Russia won't choke supply
• Stocks regroup as investors hold their breath on Ukraine
• EUR/USD to dip towards 1.11 before turning higher later in the year – Rabobank
• GBPUSD Near Term: Upside favored

 

 

FOREX

 

 

 

New Zealand dollar jumps as RBNZ flags more hikes ahead

 

 

The New Zealand dollar jumped to five-week highs on Wednesday as the country's central bank hiked rates as expected and signalled a more aggressive path forward than even the most hawkish investor had wagered.

The kiwi dollar quickly climbed 0.5% to $0.6764 , shattering resistance around $0.6735 and opening the way to retracement targets at $0.6793 and $0.6890.

The Reserve Bank of New Zealand (RBNZ) raised rates 25 basis points to 1.0% but revealed it came close to moving by 50 basis points to head off a further pick up in inflation expectations.

 

 

Dollar dips in choppy trade as investors weigh Ukraine scenarios

 

 

The U.S. dollar dipped slightly against a basket of major currencies on Tuesday amid choppy trade spurred by developments in Ukraine after Russian President Vladimir Putin recognized two breakaway regions in the country and ordered troops to the area.

The Kremlin said it remained open to diplomacy with the United States and other countries as it faced actions from a slew of countries. Britain published a list of sanctions and Germany froze the Nord Stream 2 Baltic Sea gas pipeline project, which would have significantly increased the flow of Russian gas.

 

 

COMMODITIES

 

 

Gold flat as higher U.S. yields counter safe-haven bids

 

 

Gold was flat on Wednesday, holding near a nine-month high hit in the last session, as safe-haven demand was offset by a rise in Treasury yields following the first wave of U.S. and European sanctions on Russia for sending troops into eastern Ukraine.

 

 

Oil pulls back on view western sanctions on Russia won't choke supply

Oil prices took a breather on Wednesday after surging to seven-year highs in the previous session as it became clear the first wave of U.S. and European sanctions on Russia for sending troops into eastern Ukraine would not disrupt oil supply.

At the same time, the potential return of more Iranian crude to the market, with Tehran and world powers close to reviving a nuclear agreement, also kept a lid on prices, which hit seven-year highs in the previous session.

 

 

STOCKS

 

 

Stocks regroup as investors hold their breath on Ukraine

 

 

Asian stocks steadied on Wednesday and demand for safe-havens waned a little as investors regarded Russian troop movements near Ukraine and initial Western sanctions as leaving room to avoid a war.

S&P 500 futures were up 0.4% in early Asia trade, after U.S. President Joe Biden left the door open to diplomacy as he announced sanctions on two Russian banks and some elites close to President Vladimir Putin.

 

 

 

ANALYSIS

 

 

EUR/USD to dip towards 1.11 before turning higher later in the year – Rabobank

“The market is already positioned long of USD and this appears to be creating some indigestion on attempts to break below EUR/USD 1.13.”

“Given the ongoing geopolitical risks, signs that the ECB will remain cautious on policy tightening and expectations that the Fed will be hiking rates in just a few weeks’ time, we see scope for EUR/USD to edge towards 1.11 during H1 before turning higher later in the year.”

 

 

CHART

 

 

GBPUSD Near Term: Upside favored

 

 

Technical View: Long position above 1.354. Target 1.366. Conversely, break below 1.354, to open 1.35.

Comments: The pair is expected to resume advance after correction.

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Source: Trading Central
 

CALENDAR

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

 

 

Footnotes
https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/eur-usd-to-dip-towards-111-before-turning-higher-later-in-the-year-rabobank-202202221401
https://www.reuters.com/markets/rates-bonds/new-zealand-dollar-jumps-rbnz-flags-more-hikes-ahead-2022-02-23/
https://www.reuters.com/business/yen-ticks-higher-euro-falters-ukraine-crisis-deepens-2022-02-22/
https://www.reuters.com/markets/europe/gold-flat-higher-us-yields-counter-safe-haven-bids-2022-02-23/
https://www.reuters.com/business/energy/oil-pulls-back-view-western-sanctions-russia-wont-choke-supply-2022-02-23/
https://www.reuters.com/markets/europe/global-markets-wrapup-1-2022-02-23/