NZD: Relief provided by RBNZ? - Rabobank

According to Jane Foley, senior FX strategist at Rabobank, NZD had jumped around 1.5% vs. the USD on the back of the statement from RBNZ Governor Orr as he dismissed expectations that policy makers could be leaning further towards cutting rates this year.

Key Quotes

“While this likely sets the scene for further downside pressure on AUD/NZD, we continue to see global headwinds as leaving open a risk of a RBNZ rate cut this year and see scope for further downside pressure on NZD/USD in the coming months.”

“Today’s official policy statement states that the RBNZ expects to keep rates on hold through 2019 and 2020 and did nothing to endorse recent speculation that the central bank could be minded to ease policy.”

“The risks highlighted in the Bank’s official statement this morning point to a mixed bag. On the downside, the RBNZ stated that “trading-partner growth is expected to further moderate in 2019 and global commodity prices have already softened, reducing the tailwind that New Zealand economic activity has benefited from. The risk of a sharper downturn in trading-partner growth has also heightened over recent months”.  However, on the upside the Bank stated that low interest rates in addition to fiscal spending should support a pick-up in GDP growth in 2019.”

“In view of the offsetting nature of these risks the steady policy outlook of the RBNZ is easy to understand. That said, our view that the US/China trade wars will drag on in some form for a prolonged period coupled with signs of a broader slowdown in global growth in addition to a recent spate softer than expected domestic data tilts these risks to the downside.  We continue to favour selling rallies and look for a move towards NZD/USD 0.66 on a 3 month view.”

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD struggling at the lows ahead of US GDP

EUR/USD is trading in the low 1.1100s, consolidating its losses. Markets are stalling ahead of the all-important US GDP report which carries high expectations. Some suspect a "sell the fact" response in reaction to an OK number.


GBP/USD recaptures 1.2900 amid the Brexit impasse, ahead of US GDP

GBP/USD is trading slightly above 1.2900, recovering the lost ground after hitting two-month lows. The Brexit impasse weighs as the main parties have not made progress. The anticipation to US GDP limits movements.


USD/JPY off-highs, but stays above 200-day MA

USD/JPY is enjoying good two-way price movements, with the upside capped by the risk-off trades in the Asian equities and Yen flows ahead of the 10-day holiday while the downside remains cushioned by mixed Japanese macro data and renewed optimism over the US-China trade deal. 


US First Quarter GDP Preview: Reasons to be cheerful

US economic growth forecast to be stable in the first quarter. Improved consumer attitudes and retail sales give reason for optimism. Labor market key to economic growth.

Read more

Gold climbs to 1-1/2 week tops, back above $1280 level ahead of US GDP

Gold edged higher on the last trading day of the week and jumped back above $1280 level, just above over one-week tops set in the previous session.

Gold News