The Reserve Bank of New Zealand expected to hold the interest rate in June meeting. It is widely accepted that the RBNZ would be on hold call. Earlier this week, the RBA hold the interest rates boosted the $A against the greenback.
Economists at ANZ, Westpac, First NZ Capital and Deutsche Bank think the official cash rate will be left at 2.25 per cent – although they all pick at least one further cut is likely this year reported by NZHERALD.
It is a close call – eight out of 15 economists polled recently by Bloomberg expected the OCR to be cut to a new low of 2 per cent, with the remaining seven forecasting no change. Thirteen of the 15 economists predicted that if Wheeler does not cut on Thursday, he will lower the OCR in August. The current OCR stands at 2.25%.
Technical view: The cross is trading at 0.7010 trading with strong gains ahead of the RBNZ event on Thursday’s early hours of local time at 9.00AM and the media conference at 11.00am local time.
Earlier weekly resistance seems at 0.7055 and 100.fe seems at 0.7085. Above these 100 week’s moving averages in focus seems at 0.7125 and 0.7200.
The cross has been facing strong resistance at 200Msma for straight three months seems at 0.7040. If the price settles above 0.7060 few pips higher retracement would expect to much higher levels.
For trading purpose support finds at, 0.6990, 0.6940 and 0.6890.
If the RBNZ hints further rate cut, the cross likely to shift to the back gear to the support levels. Market participants focus to guidance and concerns of Auckland house price inflation.
In March Monetary Policy Statement RBNZ revealed that, “House price inflation in Auckland has moderated in recent months, but house prices remain at high levels and additional housing supply is needed. Housing market pressures have been building in some other regions”.