The New Zealand Dollar narrowly underperformed in otherwise quiet overnight trade. The move may reflect pre-positioning ahead of the upcoming RBNZ monetary policy announcement, with traders looking to trim exposure ahead of top-tier event risk.
A rate hike is not expected this time around but priced-in policy bets reflected in OIS rates show traders envision at least one 25bps increase in benchmark borrowing costs over the coming 12 months. Those bets may be disappointed if an uncertain global outlook makes for a cautious policy statement.
A near-empty data docket in European and US trading hours leaves markets without an obvious, go-to catalyst. This amplify investors’ focus on may be disappointed as markets continue to yearn for details on the Trump administration’s economic policy trajectory.
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** All times listed in GMT. See the full DailyFX economic calendar here.
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