The good times may be over in New Zealand
NZD/USD has quickly fallen after New Zealand authorities said they’ve found one case of community spread.
That may seal the case against a 50 bps hike tomorrow.
The way delta is going, it is only a matter of time before New Zealand is struggling the way that China, Australia and the rest of the region is.
The delta variant seemingly can’t be stopped. At best, New Zealand is trying to hold off the virus until it vaccinates enough people. Currently, they’re vaccinating those over-50. In total, just 19% of people are fully vaccinated while another 14% are partly vaccinated. It’s going to take some time to get to levels where they’re willing to live with it, especially with all the political capital tied up in the success so far.
All that said, we’re talking about 1 case here and there’s a good chance they can get it right back under control and go another month without another case.
For now though, the market is pricing in a 20% chance of a 50 bps hike and Orr doesn’t mind a surprise but I just can’t see a reason to rush.