RBNZ to remain on pause after rate cut in May

Stuart Cowell HFM

USDNZD, Daily

The Reserve Bank of New Zealand (RBNZ) is widely expected to keep the OCR (Official Cash Rate) at the current record low 1.50%, when they announce their decision at 02:00 GMT on Wednesday. The OCR is the means by which the RBNZ manages monetary policy for the New Zealand economy, by lending overnight cash at 25 basis points above the OCR, and receiving deposits and paying interest at 25 basis points below the OCR.

The cut at their last meeting (May 8) was also widely anticipated, following the increase in “easing bias” from Governor Orr and other members of the RBNZ board that had been gaining momentum for a number of months. New Zealand is an export-driven economy with commodities (particularly soft commodities) accounting for 40% of all exports, with key neighbours Australia and China being vital markets. This puts increased emphasis on a competitive exchange rate.

Following a prolonged move down, the NZDUSD bounced from a double bottom low at 0.6490 after last week’s announcement from the FOMC. The move has stalled, ahead of the RBNZ, at the 38.2 Fibonacci level and key round number at 0.6550. A breach of the June high at 0.6680 could see further moves to the 50.0 Fibonacci and 200-day Moving Average resistance zone at 0.6700-20. Support sits at the 50-day moving average and psychological 0.6600 and 0.6500.

Author

Stuart Cowell

HFM

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, c

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.