RBNZ rate statement: what lies ahead for the NZD?

RBNZ rate statement: what lies ahead for the NZD?

2022-08-30 • Updated

The Reserve bank of New Zealand holds a meeting on Wednesday at 3:00 MT time. As usual, we await an update on the monetary policy and interest rate. Currently, the regulator keeps the rate at 0.25%. Analysts don’t expect any change to it, given current performance of New Zealand’s economy. Still, a dovish surprise is seen as a possible outcome.

Why the RBNZ may be dovish?

New Zealand has been showing pretty impressive post-Covid results. The country successfully handled the pandemic and released better-than-expected inflation figures for the fourth quarter of 2020 (0.5% vs. the forecast of 0.2%). These facts diminished the need in negative interest rates and took the NZ economy on track to a quick recovery. Still, the country has only just started the vaccination process, and the travel industry remains under pressure. Additionally to that, the RBNZ does not like rising bond yields and surging kiwi. The New Zealand dollar is trading at the highs of 2018 against the US dollar. Combined with the booming housing market, skyrocketing NZD worries policymakers.

Thus, the RBNZ may try to hold rising kiwi by highlighting existing risks from closed borders and late vaccination.

According to JP Morgan analyst, "We’ll hear from the RBNZ tonight and the risk for me is a dovish surprise, I will be looking to be short NZD into the meeting”

Another problem that might be in the focus of the RBNZ board is the QE limit. The bank might have bought as many government bonds as permissible. That’s why it might need to take unusual actions during the upcoming meeting.

The technical outlook for NZD/USD

The kiwi has been implementing a bullish pattern. Right now, it is trading near the resistance at 0.7350. If the RBNZ provides a dovish surprise, the pair will slide to 0.7150 with a high potential of a breakout. The next support will lie at 0.7010. If the resistance at 0.7350 is broken, the next key level will lie at 0.7430. 

NZDUSDDaily.png

TRADE NOW

Similar

RBNZ Surprised the Market Again!
RBNZ Surprised the Market Again!

The Reserve Bank of New Zealand surprised the markets again by refraining from raising interest rates a day after the country announced a nationwide lockdown due to multiple covid19 cases in the country…

Latest news

US100: Has the correction ended?
US100: Has the correction ended?

Bullish Scenario: Buys above 17910 with TP:18098.07, TP2:18277, and TP3: 18415 Bearish Scenario: Sells below 17850 with TP1:17730, TP2: 17700

Stocks To Watch For March
Stocks To Watch For March

During his program on CNBC on February 28, Jim Cramer expressed frustration with the impact of earnings reports on market behavior, noting how they often prompt rash decisions by average investors. He criticized the short-term focus and lack of attention to nuance in news coverage of earnings. Cramer cited examples of Home Depot and Lowe's, highlighting how investors reacted hastily to headline news without considering the broader context provided in earnings calls.

Nasdaq, S&P 500 Reach Record Highs
Nasdaq, S&P 500 Reach Record Highs

After creating record highs, Wall Street's main indexes opened on Wednesday and began to edge lower, reflecting cautious sentiment among investors. They're eagerly awaiting crucial inflation data that could impact the U.S. Federal Reserve's interest rate decisions. The upcoming release of the personal consumption expenditures (PCE) price index is expected...

Deposit with your local payment systems

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera