RBNZ overview
Reserve bank of New Zealand (RBNZ) is up for releasing its latest interest rate decision and rate statement today on 12 pm Syd/9am Sing/HK or 01:00 GMT.
Markets are looking for the RBNZ to hold the official cash rate (OCR) at 1.75% with a slightly dovish shift in the rate statement in order to confirm expectations of a rate cut in November or early 2020. The OCR decision will join the RBNZ rate statement but won’t accompany forward guidance neither the press conference from the central bank Governor.
Various banks came out with their forecasts ahead of the event but all of them expect no change in today’s monetary policy while having differences over the bearish outlook.
Analysts at ANZ say,
A steady hand at 1.75% is assured. We expect Governor Orr to repeat the key lines from the Feb MPS: “We expect to keep the OCR at this level through 2019 and 2020. The direction of our next OCR move could be up or down.” While there has been plenty of dovish momentum in global markets in recent weeks and markets price around a 70% chance of a rate cut by end-2019, New Zealand’s decent Q4 GDP data last week argues for limited change in the statement from 13 February.
TD Securities say,
The RBNZ OCR Review is widely expected to make the smallest ripple possible. The recent Dec qtr GDP report revealed that domestic demand was strong (consumption and investment, public and private) while trade was thought to be neutral for growth, but in the end added another +0.6%pts. With inflation expectations anchored just above 2% and maximum sustainable employment achieved, there are no triggers for the RBNZ to change its February stance where the next cash rate move “could be up or down”, and that the cash rates is likely to stay “unchanged through 2019 and 2020”. There are no updated forecasts, no OCR forward guidance nor press conference, these are scheduled for 8 May.
How could the RBNZ affect NZD/USD?
Given the likelihood of no major announcements from the RBNZ, the NZD/USD pair may struggle around nine-month-old descending trend-line resistance of 0.6915 should the central-bank repeats its February statement indicating next cash rate move “could be up or down”.
However, a dovish tilt could drag the pair towards 0.6870 immediate support-line ahead of highlighting 50-day simple moving average (SMA) of 0.6830.
On the contrary, an upbeat report statement might help the Kiwi surpass 0.6915 upside barrier and rally towards 0.6940, 0.6970 and 0.7000 resistances.
Key notes:
RBNZ: No fireworks coming - TDS
NZD/USD remains volatile near 0.6900, all eyes on RBNZ
NZD/USD Technical Analysis: Kiwi bears looking at 0.6890 ahead of RBNZ
About the RBNZ interest decision and statement
The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.