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TRADING THE NEWS: RESERVE BANK OF NEW ZEALAND (RBNZ) INTEREST RATE DECISION
The Reserve Bank of New Zealand’s (RBNZ) meeting may shake up the near-term outlook for NZD/USD as the central bank shows little to no interest in altering the outlook for monetary policy.
Unlike its major counterparts, the RBNZ may stick to the same script and merely reiterate its pledge that the official cash rate (OCR) will be ‘at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.’ With that said, little to no changes in the forward-guidance for monetary policy may spark a bullish reaction in the New Zealand dollar as it curbs speculation for an RBNZ rate-cut.
However, the RBNZ may respond to the slowdown in global growth as Governor Adrian Orr and Co argue that ‘the direction of our next OCR move could be up or down,’ and a batch of dovish comments may drag on the New Zealand dollar especially if the central bank shows a greater willingness to further support the economy.
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