RBNZ to keep policy on hold this year – GrowthAces

FXStreet (Barcelona) - The GrowthAces Research Team shares the key points out of Governor Wheeler’s speech, and further note that RBNZ might keep rates on hold this year, and might shift to hiking rates in early 2016.

Key Quotes

“The Reserve Bank of New Zealand held its benchmark rate steady, as widely expected.”

“RBNZ Governor Graeme Wheeler said the strength of New Zealand's economy, with growth projected above 3% over the next two years, was the key difference versus countries such as Australia and Canada, which have seen rates cuts this year.”

“Wheeler said a 1-3% inflation band was still an appropriate policy framework and the target of reaching the midpoint was still "highly relevant”."

“The RBNZ sees annual CPI at 0.4% at the end of 2015 (vs. 1.5% previously), 2.0% at the end of 2016 (vs. 2.0% previously). The RBNZ sees GDP growth at 3.2% in year-to-March 2015 (vs. 3.5% previously) and 3.5% in year-to-March 2016 (vs. 3.1% previously).”

“We expect the RBNZ to keep rates unchanged by the end of the year. In our opinion the next move will be a rate hike and it is possible at the beginning of 2016.”

“Our short NZD/USD taken reached its stop-loss level at 0.7320. Given broad USD strength, we got short again today at 0.7390. The target is the same as previously – 0.7130.”

“Significant technical analysis' levels:

Resistance: 0.7407 (hourly high Mar 12), 0.7515 (high Mar 6), 0.7596 (high Mar 5)

Support: 0.7275 (hourly low Mar 12), 0.7192 (low March 11), 0.7177 (low Feb 3)”