NZD/USD: the potential of a near-term profit-taking bounce on RBNZ - ANZ
|Analysts at ANZ noted that this morning we have the RBNZ OCR decision, with no change in the OCR is universally expected.
Key Quotes:
"With no accompanying forecasts or Monetary Policy Statement, much attention will be paid to the one-page statement released alongside the decision. Since the May MPS, developments have been negative on balance, and we expect that a similar message will be retained: the RBNZ will remain cautious until inflation shows consistent signs of life."
"We expect a reiteration of the neutral message that the next move in interest rates could be either up or down, depending on data flow. But while the message is likely to be similar, the question is whether the wording of the statement will change materially."
"It is possible that the statement will be regularly refreshed under the new Governor to avoid it becoming formulaic, although this Morning Focus author wonders if they might quickly run out of new ways to say “interest rates will be low for some time yet."
NZD/USD outlook
"A stronger USD, together with yesterday’s poor Business Outlook survey, has seen the NZD break key downside support levels. One has to wonder about market positioning here, leaving the potential of a near-term profit-taking bounce. However, the medium-term picture looks to be for more weakness. Today it is obviously about the RBNZ."
"Support 0.6740 Resistance 0.6850."
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