NZDUSD: RBNZ On The Way
Updated
The Reserve Bank of New Zealand will likely give the Kiwi a boost of volatility in the upcoming Asia session with its latest statement on monetary policy. Expectations are for no change this month as recent economic data has been net positive, and as they wait to see the full extent of damage the COVID-19 is set to do to the world economy. The scenario to watch out for is a more dovish-than-expected RBNZ and reversal pattern back to the downtrend after the event for the bearish market. For the bullish bias, any rhetoric lowering the odds of a potential rate cut this year will likely draw in buying support for the Kiwi, at least for the short-term as recent sessions have shown global positive risk sentiment as the main driver for the financial market. One news which might have earlier sparked some volatility on comdolls could be "WHO's Tedros, the first vaccine for COVID-19 (coronavirus) could be ready in 18 months".
Note
Reserve Bank of New Zealand Governor Orr press conference following the statement earlier- many signs that household spending growth is increasing
- fiscal boost eases pressure on monetary policy
- pleased to see inflation expectations around 2%
- OCR at 1% is very stimulatory
- see jobs growth, wages growth
- still doing work on unconventional policy tools
- hope we'll never have to use unconventional policy
RBNZ … signaled it is unlikely to cut again unless the coronavirus pandemic impact becomes more severe than expected.
That surprised the market which had expected an easing bias to be retained.
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A hawkish shift from the guidance provided in Novembereffectively signaling the easing cycle is over. Indeed, it forecasts one hike by late 2021. - Author: Eamonn Sheridan
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New Zealand food prices rebound by 2.1% after earlier 0.2% dipNote
New Zealand Business NZ manufacturing index up from 49.2 to 49.6
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