The Reserve Bank of New Zealand kept interest rates unchanged at a record low 0.25 percent earlier this morning, and talked up the need for more policy stimulus, while talking down the ongoing economic recovery.
Financial markets had been hoping that the RBNZ may be the first central bank to come out with hawkish commentary, as the global economy starts to show signs of improvement and enhanced growth prospects.
Governor Orr and the policy board of the RBNZ decided to keep large scale asset purchases in place at NZD $100 billion, and the Funding for Lending Programme unchanged. Again, some economists thought that the central bank may start to reduce purchases at this meeting. The New Zealand dollar took a tumble on the foreign exchange market as the RBNZ announced this.
The more positive signs the market was hoping for came from the economic forecasts from the central bank. The RBNZ revised growth, inflation, and employment higher, as all metric have improved since the November meeting.
Just so the market did not get too carried away with the revised forecasts, the RBNZ also added some dovish commentary into the mix today. The RBNZ said that outlook for the New Zealand economy remains “highly uncertain”.
The RBNZ statement also noted “This ongoing uncertainty is expected to constrain business investment and household spending growth,” it said, adding that inflation and employment would likely remain below its remit targets over the medium term in the absence of prolonged monetary stimulus.
Going forward, the commodity boom is helping to drive demand for the New Zealand dollar and commodity-related currencies in general. The central bank will be acutely aware that commodity appreciation is likely to cause the New Zealand to post more gains against the US dollar, euro, and Asian currencies.
The ActivTrader Market Sentiment tool shows that traders are extremely bearish towards the New Zealand dollar currency. Traders are massively on the wrong side of the market move here.
With such an extremely large one-way sentiment skew it is extremely likely that the New Zealand dollar will continue to head higher. Traders are simply too bearish and running against the prevailing market trend.
Source by ActivTrader.
A comprehensive website for traders, both experienced and new! Checkout our content and learn how to invest and speculate in the markets using margin traded products. Our team of educators has extensive experience and is here to help. Enjoy!
© 2020 YouTrading UK - Leaders in Trader Training.
Cookie | Duration | Description |
---|---|---|
__cfduid | 1 month | The cookie is used by cdn services like CloudFare to identify individual clients behind a shared IP address and apply security settings on a per-client basis. It does not correspond to any user ID in the web application and does not store any personally identifiable information. |
_wpfuuid | 11 years | This cookie is used by the WPForms WordPress plugin. The cookie is used to allows the paid version of the plugin to connect entries by the same user and is used for some additional features like the Form Abandonment addon. |
cf_use_ob | This cookie is set by the provider Cloudflare content delivery network. This cookie is used for determining whether it should continue serving "Always Online" until the cookie expires. | |
cookielawinfo-checbox-analytics | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics". |
cookielawinfo-checbox-functional | 11 months | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". |
cookielawinfo-checbox-others | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other. |
cookielawinfo-checkbox-advertisement | 1 year | The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Advertisement". |
cookielawinfo-checkbox-necessary | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary". |
cookielawinfo-checkbox-performance | 11 months | This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance". |
viewed_cookie_policy | 11 months | The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data. |
Cookie | Duration | Description |
---|---|---|
YSC | session | This cookies is set by Youtube and is used to track the views of embedded videos. |
Cookie | Duration | Description |
---|---|---|
_ga | 2 years | This cookie is installed by Google Analytics. The cookie is used to calculate visitor, session, campaign data and keep track of site usage for the site's analytics report. The cookies store information anonymously and assign a randomly generated number to identify unique visitors. |
_gid | 1 day | This cookie is installed by Google Analytics. The cookie is used to store information of how visitors use a website and helps in creating an analytics report of how the website is doing. The data collected including the number visitors, the source where they have come from, and the pages visted in an anonymous form. |
Cookie | Duration | Description |
---|---|---|
_fbp | 3 months | This cookie is set by Facebook to deliver advertisement when they are on Facebook or a digital platform powered by Facebook advertising after visiting this website. |
fr | 3 months | The cookie is set by Facebook to show relevant advertisments to the users and measure and improve the advertisements. The cookie also tracks the behavior of the user across the web on sites that have Facebook pixel or Facebook social plugin. |
IDE | 1 year 24 days | Used by Google DoubleClick and stores information about how the user uses the website and any other advertisement before visiting the website. This is used to present users with ads that are relevant to them according to the user profile. |
test_cookie | 15 minutes | This cookie is set by doubleclick.net. The purpose of the cookie is to determine if the user's browser supports cookies. |
VISITOR_INFO1_LIVE | 5 months 27 days | This cookie is set by Youtube. Used to track the information of the embedded YouTube videos on a website. |
Cookie | Duration | Description |
---|---|---|
_gat_UA-42160853-2 | 1 minute | No description |
cf_ob_info | No description | |
CONSENT | 16 years 8 months 3 days 6 hours 2 minutes | No description |