RBNZ: OCR to remain at 1.75% tomorrow - TDS

Sandeep Kanihama FXStreet Contributor

Analysts at TD Securities points out that the RBNZ decides on the Official Cash Rate (OCR) tomorrow and TD and unanimous consensus expect the OCR to remain at 1.75%.

Key Quotes

“Since the 9 August Monetary Policy Statement, activity has been upbeat - especially Q2 GDP growing at twice the rate the Bank expected - but we expect Governor Orr to emphasise that inflation remains persistently low, and weak business sentiment is the main downside risk to the outlook.”

“TD and unanimous consensus expect the OCR to remain at 1.75% tomorrow. We expect the tone to reflect that the Governor will "wait, watch and worry", where the next move in the cash rate could be “up or down” as per the August policy assessment. We also expect a repeat where “we expect to keep the OCR at this level ... into 2020”. Dropping this latter statement would be undeniably hawkish, and is highly unlikely.”

“Some reduction in the global risk premium is expected to benefit currencies such as the NZD. And as the kiwi is at our high-frequency fair value, we favour a squeeze in positioning and continue to look for a push towards $US0.68 in the immediate future. Governor Orr will ensure that this will not occur in a straight line.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying

The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.