NZD/USD jumps 100 pips after RBNZ rate decision

The NZD/USD jumped 100 pips to 0.6828 post-RBNZ rate decision.
RBNZ kept the interest rates unchanged at 1.75 percent and said the next move in rates could be up or down.
NZ-US bond yield differentials remain depressed near three-month lows.

Omkar Godbole FXStreet Contributor

The bid tone around the NZD strengthened, sending NZD/USD well above 0.68 after the Reserve Bank of New Zealand (RBNZ) kept the interest rates unchanged 1.75 percent.

In an expected dovish shift, the central bank pledged to keep the overnight cash rate at 1.75 percent through 2019 and 2020 and said the next move in rates could be up or down. The central bank also cited downside risks to inflation and stressed the need to keep policy supportive as the core consumer price inflation remains below the objective of 2 percent target mid-point.

The positive response from the NZD suggests the markets were likely positioned for a much more dovish RBNZ.

That said, the NZD/USD pair could retrace part of the 100-pip rally seen in the last few minutes as the 10-year NZ-US yield spread is still hovering at a three-month low of -58.78 basis points.

Technical Levels

1. R3 0.6776
2. R2 0.676
3. R1 0.675
PP 0.6734
1. S1 0.6724
2. S2 0.6708
3. S3 0.6698

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD holds losses near 1.1850 as US, China holidays keep trade muted

EUR/USD opens the week on a softer note, trading near 1.1860 during the Asian session on Monday. Activity is likely to remain muted, with United States markets closed for the Presidents’ Day holiday, while Mainland China is also shut for the week-long Lunar New Year break.

GBP/USD flat lines as traders await key UK macro data and FOMC minutes

The GBP/USD pair kicks off a new week on a subdued note and oscillates in a narrow range, just below mid-1.3600s, during the Asian session. Moreover, the mixed fundamental backdrop warrants some caution for aggressive traders as the market focus now shifts to this week's important releases from the UK and the US.

Gold remains below $5,050 despite Fed rate cut bets, uncertain geopolitical tensions

Gold edges lower after registering over 2% gains in the previous session, trading around $5,030 per troy ounce during the Asian hours on Monday. However, the non-interest-bearing Gold could further gain ground following softer January Consumer Price Index figures, which reinforced expectations that the Federal Reserve could cut rates later this year.

Top Crypto Losers: Dogecoin, Zcash, Bonk – Meme and Privacy coins under pressure

Meme coins such as Dogecoin and Bonk, alongside the privacy coin Zcash (ZEC), are leading the broader market losses over the last 24 hours. DOGE, ZEC, and BONK ended their three consecutive days of recovery with a sudden decline on Sunday, as crucial resistance levels capped the gains. Technically, the altcoins show downside risk, starting the week under pressure.

Global inflation watch: Signs of cooling services inflation

Realized inflation landed close to expectations in January, as negative base effects weighed on the annual rates. Remaining sticky inflation is largely explained by services, while tariff-driven goods inflation remains limited even in the US.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.