The Shadow Board of the Reserve Bank of New Zealand stated that the central bank should increase the Official Cash Rate (OCR) by 50bp at the upcoming meeting in July.

''Only one member from the business community was divided on whether such a large hike was necessary at the next meeting, given the fine balance between the surge in inflation and signs of slowing economic activity.''

''Beyond the July meeting, Shadow Board members believed further OCR increases were warranted, citing the very intense inflation pressures in the New Zealand economy.''

''There was a wide range of views on the degree of monetary tightening required. While many members pointed to the need for the Reserve Bank to rein in inflation pressures by lifting interest rates, emerging signs of an easing in demand raised concerns about the longer-term growth outlook.''

''These concerns meant some Shadow Board members saw limited further tightening as necessary over the coming year. The release of the latest June quarter NZIER Quarterly Survey of Business Opinion highlighted the tricky balancing act faced by the Reserve Bank as inflation pressures intensify against a backdrop of slowing demand in the New Zealand economy.'' 

NZD/USD update

Meanwhile, the kiwi is trying to make tracks to the upside and has the round 0.6200 in its sights. A break of that will open risk to the 0.6210 imbalance area on the hourly chart.