NZD Awaits RBNZ Statement

What will happen?

The Reserve Bank of New Zealand will make a policy statement on August 18 at 05:00 MetaTrader time (GMT+3). The bank will announce its decision on the interest rate and shed a light on its future monetary policy. Last time, the RBNZ held the cash rate at a record low of 0.25% and, more importantly, decided to end the emergency asset purchases by July 23. When the central bank raises rates or reduces asset purchases – it’s good for the currency. As a result, NZD/USD skyrocketed – look a the chart below! After that hawkish move, investors started expecting a rate hike in 2021 and the most optimistic ones – during this meeting in August. However, the rapid spread of the delta variant may ruin these plans. Therefore, the bank may increase rates in the next meetings: October 6 or November 24.

How to trade on the RBNZ Interest Rate Decision?

If the RBNZ hints at the rate hike sooner than expected, the NZD will strengthen.
On the other hand, negative forecasts and cautiousness around recovery will make the NZD weaker.

Check the economic calendar

Instruments to trade: NZD/USD, NZD/JPY, AUD/NZD

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nzd - new zealand dollar

Author: FBS Analyst Team

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