The Reserve Bank of New Zealand met on Tuesday to decide on its official cash rate and has lifted rates by the max expected, 50 basis points to 1.5% to combat inflationary headwinds pertaining to the Omricon disruptions and the Ukraine crisis.
NZD/USD has rallied to test the resistance of 0.6890s.
NZD/USD daily chart
Prior to the decision:
The M-formation is a reversion pattern on the daily chart and the neckline is located near the highs of Tuesday's business in the 0.6890s where it meets a 38.2% Fibonacci retracement level.
0.6820 on the downside and 0.6890 on the upside are critical levels that likely guard breakout territories for the days ahead.
On the release:
The price is stalling at 0.69 the figure five minutes after the data with a high made of 0.6901 so far.
RBNZ says:
Appropriate to continue to tighten monetary conditions.
Agreed ‘path of least regret’ to increase by more now, rather than later.
RBNZ says will remain focused on ensuring that current high consumer price inflation does not become embedded into longer-term inflation expectations.
RBNZ says monetary tightening brought forward.
RBNZ says remained comfortable with the outlook for the OCR as outlined in their February.
RBNZ says moving the OCR to a more neutral stance sooner will reduce the risks of rising inflation expectations.
RBNZ says larger move now also provides more policy flexibility ahead in light of the highly uncertain global economic environment.
RBNZ minutes:
Committee noted that the OCR is stimulatory at its current level.
Members agreed that this ‘stitch in time’ approach is consistent with near-term financial market pricing.
Committee agreed that their policy ‘path of least regret’ is to increase the OCR by more now, rather than later.
Members noted that inflation is above target and employment is above its maximum sustainable level.
Committee confirmed that further increases in the OCR are needed in order to meet their mandate.
About the RBNZ
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Further gains look likely above 0.6400
AUD/USD reversed Wednesday’s decline and rose modestly on Thursday, managing to reclaim the area beyond 0.6300 the figure against the backdrop of fresh downside pressure in the Greenback.
EUR/USD snaps losing streak, but market clouds continue to gather
EUR/USD caught a breather on Thursday, rising by four-tenths of one percent and snapping a six-day losing streak that saw Fiber shed 2% peak-to-trough.
Gold trades around $3,050, higher highs ahead
Relentless tariff jitters, coupled with renewed weakness in the US Dollar, have propelled gold prices back toward record territory—hovering just above $3,060 per troy ounce.
XRP yet to see gains despite Ripple's partnership with Chipper Cash
XRP failed to recover on Thursday, noting a 2% decline despite Ripple's latest partnership with mobile payment services provider Chipper Cash. The collaboration aims to support cross-border payments for Chipper Cash using Ripple Payments.
US: Trump's 'Liberation day' – What to expect?
Trump has so far enacted tariff changes that have lifted the trade-weighted average tariff rate on all US imports by around 5.5-6.0%-points. While re-rerouting of trade will decrease the effectiveness of tariffs over time, the current level is already close to the highest since the second world war.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.