Breaking: NZD/USD is volatile on RBNZ hawkish 75Bp hike

The Reserve Bank of New Zealand has forecasted a higher peak cash rate and has hiked rates by 75 basis points as expected. The knee-jerk was volatile in forex seeing the Kiwi rally, drop and then rally again as the statements were digested. 

The nuts and bolts are hawkish, putting a bid into the Kiwi:

RBNZ sees New Zealand economy entering recession in mid-2023.

Sees cash rate rising to higher peak of 5.5% in 2023.

Sees cash rate rising to higher peak of 5.5% in 2023.

Hikes official cash rate 75bps as expected to 4.25%.

Hikes official cash rate 75bps as expected to 4.25%.

About the RBNZ interest rate decision and rate statement

The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.