Kiwi dollar soars after RNBZ rate decision
The decision to leave policy unchanged has supercharged NZD/USD, which has rallied to its highest level since March 2019.
New Zealand central bank leaves rates unchanged
Unlike other central banks, New Zealand’s Reserve Bank (RBNZ) has decided to leave policy unchanged, for both interest rates and for its quantitative easing programme.
The decision to hold fast on interest rates at 0.25% was expected, but markets had expected that the quantitave easing (Q/E) target and potentially the duration of purchases would be extended. This move to remain unchanged caught the market by surprise, bolstering the New Zealand dollar against a host of other currencies.
A move to negative interest rates also now seems much less likely, another factor that has helped to lift the currency. Instead rates will remain above 0%, although a move higher seems unlikely given the bleak economic outlook and the potential for further economic weakness later in 2021.
NZD/USD technical analysis
The NZD/USD pair has continued its recovery in recent weeks, pushing to its highest level since March 2019, and leaping through the summer highs around $0.6787. Further gains target $0.693, an area that marked resistance from December 2018 until March 2019, which was followed by a fresh move lower.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Be ready to act on ECB opportunities
Learn how the ECB’s monetary policy announcements affect interest rates and price stability ahead of its next meeting in 22 April 2021.
- How might the next meeting affect the markets?
- What are the key rate decisions to watch?
- Why is the Governing Council announcement important for traders?
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
