When is the RBNZ interest rate published and how could it affect the NZD/USD?

Early on Wednesday, at 02:00 GMT, the market will know the key monetary policy decision of the Reserve Bank of New Zealand (RBNZ)amid hopes that the New Zealand central bank will once again take a hawkish stance, despite the doves showing their muscles of late.

The RBNZ will fuel market moves with its 12th consecutive rate hike, expected at 0.25%, early on Wednesday. The interest rate decision will be accompanied by the RBNZ rate statement, which may provide more details on the central bank’s next moves, making it crucial for NZD/USD traders. In addition, RBNZ Governor Adrian Orr’s press conference at 03:00 GMT also adds to the importance of Wednesday for Kiwi traders.

Ahead of the event, the Australia and New Zealand Banking Group (ANZ) said,

We expect a 25 basis point rise to 5.5% with a firm tone, and a firm OCR trajectory, with a high of around 6% (previously 5.5%). We see a 40% chance of a 50 basis point rise, and upside risks to our forecast for a 5.75% OCR high, as that forecast preceded the quotes. We cannot be sure of the magnitude of the upside fiscal risk already built into April’s unexpected 50 basis point rise. Another key uncertainty is how much weight the RBNZ will attach to rising migration figures.

Along the same lines, FXStreet’s Dhwani Mehta said,

If the Reserve Bank of New Zealand delivers a double surprise by raising rates 50 bps and raising the top rate projection to 6.0%, the NZD/USD pair is likely to see a decisive run into the critical supply zone near 0.6390, from where the pair has faced rejection five times since early February.

How could it affect the NZD/USD?

The NZD/USD pair is showing typical pre-RBNZ inaction, having posted the biggest drop in a week the previous day. In doing so, the Kiwi pair also pays little attention to the latest New Zealand (NZ) retail sales for the first quarter (Q1).

Given the clear early signs of a 0.25% rate hike, the NZD/USD pair may not offer a major reaction to the RBNZ rate hike if it matches the market consensus and leaves forecasts unchanged. maximum rates. However, recent concerns that inflation remains too high, despite the easing of late, are coupled with fears of further price pressures from the nation’s “no-frills” budget to keep RBNZ hawks hopeful and therefore any 0.50% rate hike surprise could provide a tailwind for the pair.

Aside from interest rates, the economic forecasts and language of the RBNZ rate statement will also be key for NZD/USD traders.

Technically, a symmetrical fifteen-day triangle restricts NZD/USD’s immediate moves between 0.6225 and 0.6270, as the RSI, as well as the MACD, tease the bears.

About the RBNZ interest rate decision and interest rate statement

The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ turns aggressive on the inflationary outlook for the economy and raises interest rates, the New Zealand dollar will benefit. The RBNZ rate statement contains explanations of its interest rate decision and comments on the economic conditions that influenced its decision.