[MARKET ANALYSIS] NZD outperforms as the RBNZ hikes rates by 25bps to 2.50%

DXY trades in a narrow 101.10-101.22 range despite the renewed aggression between the US and Iran, primarily as a result of IRGC strikes on 3 commercial ships in the Strait of Hormuz. Looking ahead, focus will be on the FOMC minutes from the June meeting.
EUR and GBP rotate in tight ranges, with EUR/USD briefly slipping below the 1.1400 handle while GBP/USD trades either side of the 1.3350 mark. Not much on the docket in either region. ECB minutes are expected on Thursday, while final German and French inflation figures are to be released on Friday.
USD/JPY regained the 162.00 handle during Tuesday’s session and has continued to extend higher on Wednesday, topping at 162.46. An interesting report by Asahi and Nikkei, stating that the Japanese government may tweak a reference to monetary policy in its annual policy agenda to avoid the appearance that it is putting pressure on the BoJ.
NZD/USD is the G10 outperformer, after the RBNZ hiked rates by 25bps, unanimously, and signalled further hikes to bring inflation to the 2% target mid-point.

What our latest note said

US Market Open, 21 Oct, 10:29 UTC · what it led with

Pakistan Army Chief Munir brought the "final warning" from the United States to Iranian officials, which called on Iran to submit to the US demands for concessions on the nuclear issue before taking any other steps.

The UK government has approved the Jackdaw North Sea gas field.

Headlines that moved markets

FX headlines from our feed, and what the market did next.

Fed’s Waller (voter) says more rate hikes are likely needed to tame inflation, but there is flexibility over the pace and hikes do not need to be consecutive.

DXY+0.1%

Japan's GPIF didn't discuss allocation at its September meeting, Bloomberg reports.

USD/JPY+0.1%

Japanese FX Official Mimura says they are closely watching to see if markets take the clear message they are giving at face value. Not satisfied with or reassured by recent JPY action.

USD/JPY−0.5%

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[MARKET ANALYSIS] NZD outperforms as the RBNZ hikes rates by 25bps to 2.50%

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