News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Heads Up:🇧🇷 Interest Rate Decision due at 22:00 GMT (15min) Actual: 6.25% Expected: 6.25% Previous: 5.25% https://www.dailyfx.com/economic-calendar#2021-09-22
  • But ,how do you really feel? https://t.co/FCf3idzUOH
  • Central Bank of Brazil sees an additional 100 bps rate hike in October - BBG
  • Brazilian Central Bank hikes 100bps as expected. We have to split hairs for 'hawkish/dovish' in the Fed's views. Pretty straightforward here...
  • Central Bank of Brazil: - Raises Selic rate by 100 basis points to 6.25% - BBG
  • ARKK Innovation (ARKK), the EFT created by Cathie Wood that epitomizes disruptive growth investing, has trended downwards since Sept. 7 after failing to clear resistance in the 126.50 area. Get your market update from @DColmanFX here:https://t.co/TIcfOdpmpu https://t.co/RhPa39Dygw
  • Speaking of monetary policy changes, the Brazilian central bank is due to announce its updated policies and the economist consensus is for a 100bp hike to 6.25%. Keep an eye on $USDBRL. Scenario with the most market-moving potential in my book would be a hold and USDBRL rally
  • The implied rate hikes from the Fed through the end of next year (Dec 2022 vs current Fed Fund futures contracts) jumped after today's FOMC report. Goes a long way towards explaining the $DXY Dollar jump here https://t.co/bHP0L76B71
  • Heads Up:🇧🇷 Interest Rate Decision due at 21:00 GMT (15min) Expected: 6.25% Previous: 5.25% https://www.dailyfx.com/economic-calendar#2021-09-22
  • The corrective pullback still seems to be in play but the drop below 109.00 has been in the works for too long now, which is a sign of concern for bears. Get your $USDJPY market update from @HathornSabin here:https://t.co/ISlf6DwISE https://t.co/mSqszlVolI
NZD/USD Risks Further Losses on Bets for Imminent RBNZ Rate-Cut

NZD/USD Risks Further Losses on Bets for Imminent RBNZ Rate-Cut

David Song, Strategist

- Reserve Bank of New Zealand (RBNZ) to Hold Official Cash Rate at 2.25%.

- Will Governor Graeme Wheeler Keep the Door Open for Lower Borrowing-Costs?

For more updates, sign up for David's e-mail distribution list.

Trading the News: Reserve Bank of New Zealand (RBNZ) Interest Rate Decision

Even though the Reserve Bank of New Zealand (RBNZ) is anticipated to keep the benchmark interest rate on hold at 2.25%, fresh comments from Governor Graeme Wheeler may derail the NZD/USD advance from earlier this year should the central bank head show a greater willingness to implement lower borrowing-costs.

What’s Expected:

DailyFX Calendar

Click Here for the DailyFX Calendar

Why Is This Event Important:At the same time, the RBNZ may toughen the verbal intervention on the local currency as the central bank prefers a weaker exchange rate, and the New Zealand dollar may struggle to hold its ground should the central bank highlight a more dovish tilt for monetary policy.

Expectations: Bearish Argument/Scenario

Release

Expected

Actual

Trade Balance (MAR)

401M

117M

Business NZ Purchasing Manager Index- Manufacturing (MAR)

--

54.7

ANZ Business Confidence (MAR)

--

3.2

Waning confidence paired with the slowdown in business outputs may encourage the RBNZ to further embark on its easing cycle in 2016, and market participants may boost bets for another interest-rate cut should the central bank sound increasingly cautious this time around.

Risk: Bullish Argument/Scenario

Release

Expected

Actual

Consumer Price Index (YoY) (1Q)

0.4%

0.4%

REINZ House Sales (YoY) (MAR)

--

8.2%

Gross Domestic Product (YoY) (4Q)

2.1%

2.3%

However, signs of a more robust recovery accompanied by the pickup in price growth may prompt Governor Wheeler to adopt a more balanced outlook for monetary policy, and a less-dovish policy statement may spur a bullish reaction in the New Zealand dollar as market participants scale back bets for lower borrowing-costs.

How To Trade This Event Risk(Video)

Bearish NZD Trade: Governor Wheeler Pledges to Ease Policy Further

  • Need red, five-minute candle following the rate decision to consider a short NZD/USD position.
  • If market reaction favors a bearish kiwi trade, sell NZD/USD with two separate position.
  • Set stop at the near-by swing high/reasonable distance from cost; at least 1:1 risk-to-reward.
  • Move stop to entry on remaining position once initial target is met, set reasonable limit.

Bullish NZD Trade: RBNZ Adopts More Balanced Tone

  • Need green, five-minute candle to favor a long NZD/USD trade.
  • Implement same strategy as the bearish New Zealand dollar trade, just in reverse.

Potential Price Targets For The Release

NZD/USD Daily

NZD/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • The 2016 advance in NZD/USD may continue to unravel should there be a greater divergence in the policy outlook, while the Relative Strength Index (RSI) struggles to preserve the bullish momentum carried over from earlier this year.
  • Interim Resistance: 0.7050 (78.6% retracement) to 0.7070 (23.6% expansion)
  • Interim Support: 0.6570 (100% expansion) to 0.6590 (38.2% retracement)

Avoid the pitfalls of trading by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders" series.

Impact that the RBNZ rate decision has had on NZD/USD during the last meeting

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

MAR

2016

03/09/2016 19:00 GMT

2.50%

2.25%

-136

-120

March 2016 Reserve Bank of New Zealand (RBNZ) Interest Rate Decision

NZD/USD Chart

The Reserve Bank of New Zealand (RBNZ) unexpectedly cut the official cash rate by 25bp in March to 2.25%, with the central bank toughen the verbal intervention on the local currency as ‘the trade-weighted exchange rate is more than 4 percent higher than projected in December.’ As a result, the RBNZ argued that ‘a decline would be appropriate given the weakness in export prices,’ with Governor Graeme Wheeler leaving the door open to implement lower borrowing-costs in order to ‘ensure that future average inflation settles near the middle of the target range.’ The surprise rate-cut dragged on the exchange rate, with NZD/USD slipping below the 0.6700 handle to end the day at 0.6664.

Read More:

US DOLLAR Technical Analysis: Retesting 2016 Lows

EUR/JPY Technical Analysis: The Negative Rate Trend Line is Back

EUR/USD and USD/CHF Outside Weeks at Well-Defined Levels

Big Test For Spoos, Big Test For the Markets

Get our top trading opportunities of 2016 HERE

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES