New Zealand, Auckland

The NZD/USD pair slightly rose on Wednesday morning after the Reserve Bank of New Zealand (RBNZ) announced its interest rate decision. It is trading at 0.6761, the highest since January 20th and a 3.60% rise from its lowest level this year.

RBNZ Interest Rate Decision

The New Zealand economy is improving as the country’s demand grows. Recent data indicated that most sectors are improving. The unemployment rate, for instance, has dropped to pre-pandemic levels while retail sales have increased.

Concurrently, the manufacturing and services sectors are better indicated by the recent PMI numbers. The situation will keep improving after the country reopens its borders soon. However, like in most countries, inflation concerns remain as energy cost rises.

In its Wednesday meeting, the RBNZ pointed at a hawkish direction and is set to hike interest rate for three months in a wow. Thus, the headline rate has moved to 1%, the highest level since Covid-19 began.

Moreover, the bank announced the start of its Quantitative Easing Program (QE) by slowly reducing the holdings of its Large Scale Asset Purchase (LSAP) program. It will accomplish that through bond maturities and managed sales. The bank identified the catalyst as higher oil prices, increased transport costs, and supply challenges on the rising inflation. The price instabilities risk generating a more generalized price increase, particularly amid current domestic capacity hardships.

The RBNZ decision was hawkish though the pair’s price only moved lightly, in line with analysts’ expectations.

NZD/USD Forecast

The four-hour chart indicates a bullish NZD/USD pair in the past few weeks. It moved from the year’s lowest of 0.6527 to today’s high of 0.6761. along the way, the pair also moved above the 61.8% Fibonacci retracement level. It has also risen above the 25-day and 50-day moving averages.

Therefore, it’s likely that the pair will continue to rise as bulls target the next key resistance level at 0.6800.

NZD/USD prediction as RBNZ begins Quantitative Tightening

The NZD/USD pair slightly rose on Wednesday morning after the Reserve Bank of New Zealand (RBNZ) announced its interest rate decision. It is trading at 0.6761, the highest since January 20th and a 3.60% rise from its lowest level this year.

RBNZ Interest Rate Decision

The New Zealand economy is improving as the country’s demand grows. Recent data indicated that most sectors are improving. The unemployment rate, for instance, has dropped to pre-pandemic levels while retail sales have increased.

Concurrently, the manufacturing and services sectors are better indicated by the recent PMI numbers. The situation will keep improving after the country reopens its borders soon. However, like in most countries, inflation concerns remain as energy cost rises.

In its Wednesday meeting, the RBNZ pointed at a hawkish direction and is set to hike interest rate for three months in a wow. Thus, the headline rate has moved to 1%, the highest level since Covid-19 began.

Moreover, the bank announced the start of its Quantitative Easing Program (QE) by slowly reducing the holdings of its Large Scale Asset Purchase (LSAP) program. It will accomplish that through bond maturities and managed sales. The bank identified the catalyst as higher oil prices, increased transport costs, and supply challenges on the rising inflation. The price instabilities risk generating a more generalized price increase, particularly amid current domestic capacity hardships.

The RBNZ decision was hawkish though the pair’s price only moved lightly, in line with analysts’ expectations.

NZD/USD Forecast

The four-hour chart indicates a bullish NZD/USD pair in the past few weeks. It moved from the year’s lowest of 0.6527 to today’s high of 0.6761. along the way, the pair also moved above the 61.8% Fibonacci retracement level. It has also risen above the 25-day and 50-day moving averages.

Therefore, it’s likely that the pair will continue to rise as bulls target the next key resistance level at 0.6800.

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