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NZ lockdown dashes hopes of RBNZ rate hike

A summary of the headlines from earlier today

The snap lockdown pretty much rules out a rate hike at tomorrow’s policy meeting (it would be a major surprise now if the RBNZ does go ahead with a hike against such a backdrop), as the central bank may look to reassess depending on the virus situation.

The best-case scenario is that this is only a temporary setback and one that is dealt with quickly as the infection spread is contained and kept under control.

On the flip side, if it turns out anything similar to that of New South Wales in Australia, then there is likely more pain to follow for the kiwi as we see more unwinding in recent long exposure based on divergence trades.

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