Яндекс.Метрика NZD/USD may be headed to October lows after RBNZ decision - Credit Argicole – Technologies of the future for life!
Home / Forex Treiding / NZD/USD may be headed to October lows after RBNZ decision – Credit Argicole

NZD/USD may be headed to October lows after RBNZ decision – Credit Argicole


  • share

The firm believes that the rate cut today and trade tensions will continue to weigh on the New Zealand dollar


According to the firm’s executive director of its FX department in Tokyo, Yuji Saito, NZD/USD may test the October low of 0.6425 in the near-term after the RBNZ moved to lower its OCR earlier today. On the price retracement from the lows right after the announcement, Saito notes that the impact on the kiwi has been limited as market participants had already priced in part of the move.
Adding that “it doesn’t look that the RBNZ will ease repeatedly to push interest rates lower and the central bank may potentially take a wait-and-see stance”. As for the reasoning for a further drop in the kiwi, he argues that the currency will be sold against the dollar and the yen as risk appetite is damped by uncertainty over trade negotiations between US and China.
I wouldn’t say that the argument above is wrong but you have to factor in technical levels as part of the story too. Right now, price has retraced back above the January low of 0.6575 so sellers will have work to do in order to break below that before we can see an extension towards the October low of 0.6425.
Otherwise, with the RBNZ not really aggressively cutting rates and with the outside chance of US-China trade talks turning out for the better, the kiwi may just find some relief from current levels as we look to close out the week. But a lot of that will depend on how the latter develops more than anything else.
In that regard, tomorrow’s meeting in Washington is paramount.
ForexLive

About SkyNET

Leave a Reply

Your email address will not be published. Required fields are marked *