RBNZ Rate Decision This Evening

10 August, 2016

The Reserve Bank of New Zealand (RBNZ) will announce a rate decision at 22:00 GMT+1, which will be followed by a statement from Governor Graeme Wheeler. The RBNZ has stated on 21st July that further QE will be required to ensure the future inflation settles near the middle of the target range and a rate cut is expected.

The market and many analysts expect that the RBNZ will cut rates by 0.25%, from 2.25% to 2.0% today despite a rate cut will lead to further booming of the overheated housing market as mortgage rates will be lower. Some even predict another rate cut may happen in November. The market expectations weigh on the New Zealand dollar.

The annual inflation rate has been below 1% for seven consecutive quarters since Q4 of 2014, and below 2% since the end of 2011. The Bank’s inflation target range is between 1% to 3% with a focus on the midpoint of 2%.

In order to grapple with low inflation rate and the strengthening of the NZD may hamper the economy and drive down inflation, the RBNZ might be the next central bank to cut rates, following the Bank of England and the Reserve Bank of Australia.

However, even if rates are cut to 2%, the likely subsequent fall of the NZD may not be a sharp one for four reasons. Firstly, the 2% rate is still comparatively higher than the rates of other major currency countries. Secondly, the dollar strength has been fading since yesterday. Thirdly, the market has priced in to an extent. If the result is in line with the expectation, then the NDZ may fall initially then followed by a rally as the market will price out. The NZD could fall deeper if the rate cut is accompanied by more than expected additional QE measures.

Fourthly, the overall economic outlook seems to be positive. The Q2 GDP figure released on 15th June was 0.7%, beating the expectation of 0.5%, yet lower than the previous figure of 0.9%. The Building Permit in July was up from -0.9% in June to 16.3% in July, reaching the highest level since August 2015. The Business Confidence was 16.0, reaching the peak of this year.

On the daily chart, NZDUSD has been oscillating in an uptrend channel since 20th Jan, and forming a head and shoulder pattern since mid-June, indicating accumulated upside selling pressure. The resistances at 0.725 followed by 0.732. The supports at 0.7053 followed by 0.7053, 0.70, 0.695, 0.692, and 0.688.


Source link  
Oil hits 3-month lows

On Monday, the dynamics of oil was in the spotlight on a combination of negative factors by both the potential demand and the supply part. Asian markets...

Fed Monetary Policy Report to be released

This report is release twice a year and provides an insight into the conduct of monetary policy and economic developments and prospects for the future for the...

The Pound continues to weaken

Cable (GBPUSD) took a hit yesterday as Boris Johnson resigned from the Cabinet following the earlier decision by David Davis to part ways...


The latest Brexit proposals

The UK's Brexit Secretary David Davis has resigned along with two junior ministers, Steve Baker and Suella Braverman, over PM May's latest softer Brexit proposals...

Some ECB members want earlier rate hike

The markets remain subdued after yesterday's 4th of July celebrations in the US. Despite this Oil headlines are dominating the markets once again. US President Trump...

Gold has played out as a double top

The gold chart has played out as a double top with a break under 1300.00 signalling a move down to 1240.00 from its highs at 1365.00. We have now hit the 1240.00...


Gold chart has played out as a double top

The gold chart has played out as a double top with a break under 1300.00 signalling a move down to 1240.00 from its highs at 1365.00. We have now reached...

President Xi warns of Full Scale Trade War

Risk on sentiment returned briefly yesterday as markets retraced some of Monday’s selloff but sentiment in Asia has declined overnight. The PBOC cut...

USD extend losses in risk adverse markets

Stock markets fell hard yesterday as trade tensions deepened and the consequences of such action has investors worried. US Company Harley Davidson...


In the past 24 hours Bitcoin has gained 3.4% and reached $7686.9. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has lost -0.3377% and is now at $1.1646. Start trading and making money on Forex today.

In the past 7 days Ethereum has gained 0.57% and is now at $463.506. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Daily Forex Market Reviews


Forex Currencies Forecasts


Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets90%
2FXTMFXTM88%
3HYCMHYCM86%
4FIBO GroupFIBO Group79%
5FxProFxPro78%
6FXCMFXCM73%
7AvaTradeAvaTrade69%
8HotForexHotForex68%
9XMXM68%
10Alfa-ForexAlfa-Forex66%
  


Share: