RBNZ’s pause is highly credible – ANZ

FXStreet Insights Team FXStreet

As universally anticipated, the RBNZ left the Official Cash Rate (OCR) unchanged at 5.5%. The NZD is slightly higher after a small dip. Economists at ANZ Bank analyze the decision.

Nothing to see here

The RBNZ left the OCR unchanged at 5.5%, as universally expected. Also as expected, there was a good deal of copy-paste from the July Monetary Policy Statement. One new factor was an implicit acknowledgement that the RBNZ’s house price forecasts are too pessimistic. The RBNZ also suggested house prices may have reached ‘sustainable’ levels.

We continue to expect a 25 bps hike at the November Monetary Policy Statement, but this is not today’s story. For now, inflation indicators continue to fall obediently, and the RBNZ’s pause is highly credible.

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD makes a U-turn, focus on 1.1900

EUR/USD’s recovery picks up further pace, prompting the pair to retarget the key 1.1900 barrier amid further loss of momentum in the US Dollar on Wednesday. Moving forward, investors are expected to remain focused on upcoming labour market figures and the always relevant US CPI prints on Thursday and Friday, respectively.

GBP/USD sticks to the bullish tone near 1.3660

GBP/USD maintains its solid performance on Wednesday, hovering around the 1.3660 zone as the Greenback surrenders its post-NFP bounce. Cable, in the meantime, should now shift its attention to key UK data due on Thursday, including preliminary GDP gauges.

Gold holds on to higher ground ahead of the next catalyst

Gold keeps the bid tone well in place on Wednesday, retargeting the $5,100 zone per troy ounce on the back of modest losses in the US Dollar and despite firm US Treasury yields across the curve. Moving forward, the yellow metal’s next test will come from the release of US CPI figures on Friday.