As odds of rate hikes continue to increase across all jurisdictions, currency traders are eyeing what might happen as some central banks become trigger happy. The most hawkish looking central bank and the one that has seen expectations grow the most is the RBNZ. But as the markets price in more hikes, why is the NZ dollar the worst performing major currency? James Swerling from Ebury says it has a lot to do with how traders view the state of the cycle – suggesting that rate hikes too soon in the past have led to weakening units. That could – arguably – spell good news for the Australian dollar, James says. He adds that Investors tend to allow themselves to focus on when the next rate hike will be and how many there will be this year. So what should investors be focussed on instead? James tells us all.

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