Trading the News: Reserve Bank of New Zealand (RBNZ) Interest Rate Decision
The Reserve Bank of New Zealand (RBNZ) interest rate decision may curb the recent advance in NZD/USD[1] as the central bank is widely expected to keep the official cash rate (OCR) at the record-low of 1.75% in November.
It seems as though the RBNZ will stick to the current script at its last meeting for 2018 as officials pledge to ‘keep the OCR at an expansionary level for a considerable period,’ and Governor Adrian Orr & Co. may continue to strike a dovish forward-guidance in 2019 as ‘trade tensions remain in some major economies, increasing the risk that ongoing increases in trade barriers could undermine global growth.’
As a result, more of the same from the RBNZ may drag on the New Zealand dollar[2], but signs of strong job/wage growth[3] may push the central bank to soften its dovish tone amid ‘early signs of core inflation rising towards the mid-point of the target.’ With that said, a material shift in monetary policy outlook may ultimately fuel the recent advance in NZD/USD as it boosts bets for an RBNZ rate-hike in 2019. Sign up and join DailyFX Currency Analyst David Song LIVE[4] for an opportunity to discuss potential trade setups.
Impact that RBNZ rate decision has had on NZD/USD during the previous meeting
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