Post #16069

New Zealand's Central Bank Flips Neutral NZD/USD rolled over back toward 0.570, snapping a short-lived two-day bounce as geopolitical risk came back into focus. Markets were leaning toward de-escalation, but that quickly repriced after Trump’s address offered no real clarity — instead signaling the conflict could drag on for weeks. Prolonged tension keeps oil elevated, and that feeds directly into the inflation narrative. You’re seeing it translate into broader risk-off sentiment and pressure on growth-sensitive currencies like the Kiwi. From a macro standpoint, the RBNZ is already flagging this. Higher energy costs risk squeezing households and pushing inflation back up. While they’ve said they’ll look through short-term spikes, the tone shifts if energy-driven inflation proves sticky — that’s where rate hike risk comes back into play. In the near term, expectations have cooled. The market now sees the RBNZ holding steady next week, with odds of a May hike dropping sharply. - Alan