Kiwi set to rebound as traders wager on hikes

A 50-basis-point (bps) hike by the Reserve Bank of New Zealand (RBNZ) soon could amplify gains, while a 25-bps increase would risk disappointing the market, undermining a rebound in the currency.

SYDNEY: The New Zealand dollar looks poised to recover from its sharp selloff this month, with technical support, a yield advantage over the United States and hedge-fund bets pointing to gains in the kiwi ahead of a pivotal central bank decision.

A 50-basis-point (bps) hike by the Reserve Bank of New Zealand (RBNZ) soon could amplify gains, while a 25-bps increase would risk disappointing the market, undermining a rebound in the currency. Swaps traders are betting that a quarter-point hike is a done deal, with wagers split on a half-point hike.