- NZD/USD moves higher near 0.6030 with focus on RBNZ monetary policy.
- The RBNZ is expected to keep its OCR unchanged at 5.5%.
- The next move in the US Dollar will be guided by US inflation data for July.
The NZD/USD pair is rising to near a near three-week high of 0.6030 in North American trading on Monday. The New Zealand asset is gaining strength as the New Zealand Dollar (NZD) is performing strongly ahead of the Reserve Bank of New Zealand (RBNZ) monetary policy announcement on Wednesday.
The RBNZ is widely anticipated to keep its Official Cash Rate (OCR) steady at 5.5%. Investors will therefore be focused on interest rate guidance.
Recently, the New Zealand Institute of Economic Research (NZIER) held a “shadow meeting”, which showed that analysts were divided on cutting rates in August. More than half of analysts favoured a rate cut of one quarter to one percent to prevent the economy from slowing further. Other analysts wanted to see more evidence of a further decline in inflation.
Meanwhile, the US Dollar (USD) is trading sideways, with investors focused on the US Consumer Price Index (CPI) data for July, due out on Wednesday. The Dollar Index (DXY), which tracks the value of the Greenback against six major currencies, remains in a narrow range above 103.00.
NZD/USD is struggling to extend the upside above the immediate supply zone drawn in the range of 0.6037-0.6046 on a daily time frame. The asset has rebounded strongly above the 20-day exponential moving average (EMA) near 0.5990, which suggests that the near-term outlook is bullish. The main target is to stabilize above the 50-day EMA, which is held around 0.6030.
The 14-day Relative Strength Index (RSI) has returned to the 40.00-60.00 range, suggesting that the bearish momentum has ended.
Further upside would appear if the asset decisively breaks the May 3 high at 0.6046. This would push the asset higher towards the July 17 high near 0.6100 and the July 12 high of 0.6127.
In an alternative scenario, a downside move below the April 19 low around 0.5850 would drag the asset towards the round-level support of 0.5800, followed by the October 26, 2023 low at 0.5770.
NZD/USD daily chart
Economic indicator
Interest rate decision
RBNZ Interest Rate Decision is announced by the Reserve Bank of New Zealand.This rate affects a range of interest rates set by commercial banks, building societies and other institutions towards their own savers and borrowers. It also tends to affect the price of financial assets such as bonds, shares and exchange rates, which affect consumer and business demand in a variety of ways.
Next post:
Wed Aug 14, 2024 02:00
Frequency:
Irregular
Dear:
5.5%
Previous:
5.5%
Fountain:
Reserve Bank of New Zealand
The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing its interest rate decision and the economic assessments that influenced its decision. The central bank provides clues about the economic outlook and future policy path, which are of great relevance to the valuation of the NZD. Positive economic developments and optimistic outlooks could lead the RBNZ to tighten policy by raising interest rates, which tend to be bullish on the NZD. Policy announcements are usually followed by Governor Adrian Orr’s press conference.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
