fxs_header_sponsor_anchor

News

NZD/USD drops 20 pips on unchanged Reserve Bank of New Zealand cash rate, headed for new trend lows

NZD/USD has dropped 20 pips on the back of the RBNZ holding rates steady as widely expected at the new governor's first MPC meeting since picking up the baton on the 27th March.

This rate of 1.75% was last changed in Nov 2016 and seems as though Adrian Orr will keep it so for a considerable period of time.

Key notes from the statement as follows:

  • Sees official cash rate at 1.8% in September 2018 (unchanged)
  • Sees official cash rate of 1.8% in June 2019 (down from 1.9%)
  • Lows food, import price inflation, subdued wages keep inflation down
  • CPI remains below 2%
  • Expects to keepOCR at this expansionary level for a considerable period of time
  • Have seen an unprecedented increase in employment
  • Immigration added to the supply of labor
  • Keeping OCR at current level best contribution to maximizing sustainable employment
  • Keeping OCR and current level best contribution to maintaining low and stable inflation
  • The direction of our next move is equally balance, up or down
  • Global inflation pressures are expected to rise but remain contained

No hawkish surprises here nor any new trends under the new leadership or material changes to targets. eyes will now focus on US CPI tonight after the US PPI underperformed in the US overnight where any undershooting of inflation should ease the recent resurgence in the dollar on the 93 handle in the DXY, (overnight high was 93.41)

NZD/USD levels

The Kiwi has been sold off heavily since the Feb meeting, dropping from the lofty heights of 0.7436 down to 0.6948, (a new trend low). Seems like the bird is heading towards that level now after the RBNZ. The NZD/USD has dropped below the key 200-month moving average support at 0.6980 and technicals stay bearish with RSIs biased to the downside longer term, although stabilising out of oversold territory - pointing to a period of consolidation. To the downside, 0.6948 guards 0.6880. 

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.


RELATED CONTENT

Loading ...



Copyright © 2024 FOREXSTREET S.L., All rights reserved.