USD and S&P 500 will Choose the Direction
This week is full of important news, starting with PMIs in the key economies, with Jackson Hole Symposium as a cherry on the top.
The RBNZ rate statement: three scenarios
2020-06-24 • Updated
Today at 5:00 MetaTrader time the Reserve Bank of New Zealand will publish the rate statement. This is a wonderful opportunity for traders of the New Zealand dollar. Let’s consider the main expectations from the regulator.
What to expect?
The interest rate is expected to remain unchanged at 0.25%. As for quantitative easing measures, the Bank expanded the Large Scale Asset Purchase program (LSAP) to 60 billion New Zealand dollars during its May’s meeting. At the same time, we should keep in mind that the Reserve Bank of New Zealand prefers the weak NZD due to the export-oriented economy. Therefore, the RBNZ Governor may point out once again about the possibility of negative interest rates in order to make the currency weaker. The other thing we need to follow is the outlook of economic conditions by the bank. New Zealand has already opened up its economy due to the absence of coronavirus cases. However, as global risks related to the second wave of Covid-19 remain, policymakers may add comments about them as well.
Keep in mind that in the current economic conditions monetary stimulus can be positive for the national currency.
Let’s look at three scenarios.
Upbeat scenario. If the regulator confirms better conditions of New Zealand’s economy and do not throw any threats on negative interest rates, the NZD will get stronger. In that case, NZD/USD will rise towards 0.6570. Most likely, bulls will make an attempt to break this level and target 0.6680.
Neutral scenario. In this situation, the bank will make no major changes. The LSAP program will remain intact and the bank will take the wait-and-see attitude. In case of this scenario, NZD/USD will continue moving within a range between 0.64 and 0.65.
Negative scenario. The RBNZ will see the high NZD as a big threat to the NZ economy. At the same time, it will demonstrate readiness to the negative rates and hint for more quantitative measures ahead. The comments on the worsening global situation are NZD-negative as well. Here, we will expect the slide down, where bears will face the 0.64 level at first. In case of a breakout, the next support will lie at 0.6330.
Similar
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…
NZD is Experiencing Challenges with Forecasts
Reserve Bank of New Zealand will likely deliver up to two interest rate hikes before the end of the year and many more news!
Latest news
Will USDJPY slide lower in 2023?
Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?
BoC Rates Could Alter The Trend on USDCAD and others
Today, at 5:00 pm (GMT +2), the Bank of Canada will publish the Overnight Rate, which represents short-term interest rates, and is pivotal to the overall pricing of the Canadian Dollar in the global markets. Let's look at how the markets are faring ahead of the BoC rates release.
MSFT faces gloomy forecasts ahead of earnings report
In a call scheduled for January 25, 00:30 am GMT+2, Microsoft will publish the company's earnings for the final quarter of 2022 and comment on the results, projections, and outlook for the nearest future of the company.
