NZD lifts on RBNZ interest rate pause

22 September, 2016

The New Zealand dollar has managed to pause in the wake of the recent Reserve Bank of New Zealand interest rate statement, as the RBNZ has held interest rates flat at 2.00%. This was for the most part expected in the long run as the current economic data had been relatively positive, and we had recently seen a boost in commodity prices which would carry over into the domestic economy. It's however hard to justify further rate cutting in the near future, if we do see further rises in the economic data and pressure on inflation it could be a case of the RBNZ reversing their tune very rapidly, and I would anticipate with the lift in commodity prices could add this pressure that has been missing. The final move from the RBNZ during the meeting was to try and jawbone the currency, but the market was in no mood as it has heard it time and time again when it comes to central bank policy.

The NZDUSD has so far paused and provided little in the way of movement in the wake of the RBNZ announcement. Resistance levels at 0.7375 have so far held back any higher highs, but the reality is that we could see further pressure for the currency to lift higher than it currently is, as jawboning has failed miserably from the RBNZ and I feel that the outlook is still quite positive for the NZ economy. The next level of resistance is at 0.7401 and is likely to be a tipping point before the major level at 0.7475 which I would be surprised to see the NZDUSD move beyond.

US markets are still struggling to understand the motives of the Federal Reserve after the recent speech from Yellen was very hawkish but failed to offer any real hints as to what the future might hold. This seems like further rhetoric from the FED in the face of mixed economic data, but some key elements were gleamed from the ensuing press conference where she outlined that the FED did not have to worry too much about inflation at this stage. Yellen went on further to add "if we continue on the course for jobs without and shocks, I expect a hike this year" - this was the most hawkish statement and holds the course for an expected rate rise in the near future, but the market is still cautious about the reality of this given the dovish nature of the FED in previous years.

The market was quick to react when it takes a dovish feel of things and the S&P is no stranger to the volatility of the FED in recent teams as the bulls leapt on the chance to grab some ground after a month of volatility. Resistance is likely to be found at 2164 at this stage, and it will be interesting to see if further momentum can be found in the market at present, or if the market will indeed accept a hawkish fate and look to slip lower in the long run. 


Source link  
Yuan firms on Dollar weakness

Global investors will likely remain on high alert throughout the end of the week to see if the largest market sell-off since early 2018 will...

EM currency weakness refuses to go away

Tuesday has seen stability in Chinese markets following a very nervous beginning to the new trading week yesterday. Signs of China market stability...

Yuan eases on risk-off sentiment

Financial markets have entered the new trading week on negative footing as a mixture of different market themes weigh on investor sentiment...


Risk assets under pressure from rates

Chinese equities took a big hit after traders returned from a week-long holiday. Efforts by the People's Bank of China to free more than $100 billion...

U.S. Treasury Yields boost the greenback

The U.S. Treasury selloff on Wednesday was the biggest story in the financial markets. This time it wasn't only the rate-sensitive two-year yields that marched higher...

NAFTA deal fails to lift global risk appetite

Global investors remained defensive on Tuesday despite the U.S. and Canada agreeing to a new trade deal ending months of uncertainty...


Dollar steady after Fed raises rates

In a widely expected move, the Federal Reserve has raised its key interest rate by 25 basis points for the third time this year. The central bank...

Markets prepare for Fed meeting

The resumption in concerns around trade uncertainties, the upcoming Federal Reserve policy meeting and general political risk element that...

Could the Dollar be turning the corner?

Currencies throughout Asia have welcomed the news that the Dollar has tumbled to a near 3-month low. A number of different currencies in the...


In the past 24 hours Bitcoin has gained 0.7% and reached $6665.76956948. Open your trading account with the best cryptocurrency brokers on special terms today.

In the past 7 days the EUR/USD pair has gained 0.6352% and is now at $1.1587. Start trading and making money on Forex today.

In the past 7 days Ethereum has lost -7.76% and is now at $211.178293913. Have the most popular cryptocurrencies compared online 24/7.


Top Brokers offering Forex Market Analysis



Forex Currencies Forecasts



Top 10 Forex Brokers 2018

# Broker Review
1easyMarketseasyMarkets91%
2FXTMFXTM88%
3HYCMHYCM87%
4Alfa-ForexAlfa-Forex86%
5FxProFxPro85%
6FIBO GroupFIBO Group84%
7OctaFXOctaFX83%
8HotForexHotForex82%
9FXCMFXCM80%
10AvaTradeAvaTrade77%
  


Share: