When is the RBNZ and how could it affect NZD/USD?
|RBNZ interest rate decision overview
The Reserve Bank of New Zealand is today at 21.00 GMT and are expected to hold the OCR at 1.75% and is expected to maintain a neutral outlook for interest rates, as expressed in the May Monetary Policy Statement.
In May the RBNZ explained that the recent jump in inflation was temporary. Recent developments will likely cement that view but there are risks that the RBNZ could emphasise the equal likelihood of rate cuts or hikes and therefore this is an RBNZ meeting to watch for downside in the Kiwi.
How could affect NZD/USD?
A surprise either way could be a very dramatic event for the forex space. A rate hike would drive the kiwi higher with the bullish trend formed from 0.7200 lows, for a break of the 0.7267 20th June highs guarding 0.7298 18th June high; This is the most unlikely scenario. If the RBNZ comment again that the next move could just as well be a rate cut, the bird could drop to break supporting level,15th June lows and test 0.7100. Also, the New Zealand dollar is about 2% higher than assumed in the May MPS and jawboning could cause some softness in the bird as well.
Key Notes
"The Shadow Board again recommends the Reserve Bank leave the Official Cash Rate on hold this Thursday at 1.75 percent, with a tightening bias."
New Zealand: NZIER’s Shadow Board sees little urgency for rate increase
About the RBNZ Interest Rate Decision
RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the NZD.
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