FXStreet notes that the New Zealand dollar has consolidated earlier gains over the last month. The outlook for the kiwi remains positive, but economists at CIBC Capital Markets have tempered the expected pace of gains.

“The RBNZ delivered a projected track for the cash rate (OCR) with a first hike identified in H2 of next year. While that was only slightly ahead of market pricing heading into the decision, the confirmation promoted a firm rally in the NZD.” 

“OCR projections had not been published since early last year. The fact that the bank decided to reinstate them indicates improving confidence over the outlook. Even so, the RBNZ did go to some lengths to remind that the projections were ‘highly conditional’.”

“The yield advantage over all other G10 currencies remains, thereby underscoring NZD support. We anticipate further gains in NZD/USD to target the late February high of 0.7465.”