NZIER: Shadow Board is divided over whether the Reserve Bank should increase the OCR in May

Anil Panchal FXStreet

“The Shadow Board is divided over whether the Reserve Bank should increase the Official Cash Rate (OCR) in the May Monetary Policy Statement,” said the New Zealand Institute of Economic Research (NZIER) in its latest report. The update becomes important for the NZD/USD traders ahead of this week’s Reserve Bank of New Zealand (RBNZ) monetary policy meeting announcements.

Key quotes

A larger number of Shadow Board members viewed an OCR increase of 25 basis points to 5.50 percent is warranted, given domestic inflation pressures remain high and the upside risk to inflation due to the weather events earlier this year.

The rest of the Shadow Board members recommend the Reserve Bank should keep the OCR at 5.25 percent.

There was a divergence in views amongst the Shadow Board on where the OCR should be in twelve months.

They reflect the different concerns held by the Shadow Board members about the economic outlook for the coming year.

Recent developments, such as weaker Government tax revenue and consumer spending, and continued declines in business profitability, point to a slowing in the New Zealand economy.

Two members also pointed out the potential upside risk to inflation from rising net migration inflows and any new fiscal stimulus in the new Budget, which the Reserve Bank should keep their eyes on.

NZD/USD rises

Despite the mixed conclusion from NZIER, NZD/USD picks up bids to refresh intraday high near 0.6275 amid hawkish RBNZ expectations, as well as the US Dollar pullback amid fears of no US debt ceiling deal.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD regains balance, targets 1.1800

EUR/USD has lost a bit of momentum after its earlier push higher and is now attempting to reclaim the key 1.1800 barrier on Monday. In the meantime, investors remain focused on the evolving US–EU trade relationship after President Trump’s announcement of sweeping global tariff hikes.

GBP/USD recedes from tops, back to 1.3500

GBP/USD is extending its move higher on Monday, meeting some resistance around 1.3530 on the back of the widespread bearish tone in the US Dollar amid ongoing uncertainty around tariffs. For now, traders are watching overall risk sentiment and central bank rhetoric for the next directional cue.

Gold advances to four-week highs, focus is on $5,200

Gold is holding onto its bullish tone on Monday, hovering near monthly highs well above the $5,100 mark per troy ounce. Fresh trade-war concerns, coupled with rising geopolitical tensions in the Middle East, are keeping demand for the yellow metal well on the rise.

Crypto Today: Bitcoin, Ethereum, XRP intensify sell-off as tariff uncertainty weighs

Bitcoin, Ethereum and Ripple are trading amid increasing selling pressure at the time of writing on Monday, as investors react to fresh trade uncertainty over US President Donald Trump’s push for more tariffs.

Supreme Court nixes tariffs, Trump teases 15% global tariff

On February 20th, the Supreme Court ruled that Trump’s global tariffs under IEEPA authority were unconstitutional, effectively nullifying the framework. However, the relief was short-lived. Within hours, Trump floated a 15% blanket tariff under an alternative legal authority.

Top Crypto Losers: Zcash, Pump.fun, and LayerZero extended losses as Bitcoin loses $65,000

The cryptocurrency market starts the week in panic mode, with altcoins Zcash, Pump.fun, and LayerZero. Bitcoin falls below $65,000 as the US President Donald Trump regroups amid renewed trade policy risks.