- the RBNZ is positive in the economy, fuels NZD gains
- NZDUSD could reach a technical 0.7375 level
The RBNZ decision was one of the biggest market movers this week and NZD is the most moving G10 currency today as it gains 0.4% against the US dollar that, by the way, remains the weakest in this group. The central bank did nothing to discourage investors from the NZD. The key points from the statement are as follows:
- growth outlook remains positive
- wage inflation moderate but expected to increase gradually
- global economic growth has increased
- exchange rate has increased, partly in response to higher export prices
Basically heading into this meeting investors were wondering if the RBNZ could do something to prevent further appreciation of the NZD. The Bank saw higher NZD but it justified this increase so it looks like there is a green light for further gains. The New Zealand’s economy looks good so unless the Bank gives clear signs that it could postpone rate increases to offset higher NZD rate, markets could feel free buying the currency.
Technically NZD could look overbought on manu currency pairs, including NZDUSD, but then the pair has not yet reached the key 0.7375 resistance. With the RBNZ not interfering the pair could rise towards this level with the key support being a distant 0.7050.