RBNZ Interest Rates will be decided in today’s meeting as Governor Wheeler et al discuss the future policy direction of RBNZ. It’s very likely that RBNZ will keep rates unchanged, but there is an increasing likelihood that Wheeler may talk down the Kiwi as recent comments out of RBNZ were that the NZD is overvalued. Of course, with inflation well in check, we’ll probaby see no real action following hawkish statements (except for intervention), so ultimately in the long run I’d still bet on NZD strength.
- 5:00 pm (NY Time) RBNZ Interest Rates Decision
- Forecast 2.50% Previous 2.50%
- DEVIATION: 0.25% (BUY NZD 2.75% / SELL NZD 2.25%)
Current forecast from economists surveyed by Bloomberg agree that RBNZ is likely to leave the official rate at 2.50% during this meeting; however, in the unlikely event that Governor Wheeler surprises the market and hike/cut rates by 0.25%, we should see an immediate strong volatility in the NZD which is a great opportunity to spike trade NZD.
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: NZD/USD.
Outlook Score
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
Definition
The OCR (Official Cash Rate or RBNZ Interest Rates) influences the price of borrowing money in New Zealand and provides the Reserve Bank with a means of influencing the level of economic activity and inflation. An OCR is a fairly conventional tool by international standards.