The Reserve Bank of New Zealand made announcements regarding its monetary policy. The NZD/USD dropped.
Rate decision by the RBNZ: the downside risks for the kiwi
The Reserve bank of New Zealand will release the monetary policy statement and its interest rate at 3:00 MT on November 13. After that, the RBNZ governor Adrian Orr will conduct a press conference at 4:00 MT.
After the interest rate remained unchanged at the record low of 1% during the previous meeting, the regulator noted that there remains scope for more monetary stimulus as the economy needs to be supported. Now, analysts forecast the 64.3% chance of a rate cut by 25 basis points. The expectations of this kind of decision have increased after the release of New Zealand's business confidence and job data last week. The first indicator showed an improvement to -42.4 in October, but the figures are still negative. At the same time, the unemployment rate increased to 4.2%.
• If the RBNZ cuts its rate, the NZD will fall;
• If the RBNZ doesn’t cut its rate, the NZD will rise.
The focus of traders’ attention shifted from Brexit and the US stimulus to the coronavirus . The WHO claimed that Europe become the new Covid-19 epicenter.
Canada will publish the monthly GDP growth on October 30 at 14:30 MT time.
The European Central Bank publishes the monetary policy statement alongside with an update on the interest rate on October 29, at 14:45 MT time.