24 Jul 2013
RBNZ next: Impact on NZD/USD
FXstreet.com (Barcelona) - Despite being initially boosted by larger-than-expected trade surplus yesterday, the NZD/USD only managed to have a brief drive through 0.80 before succumbing on the poor Chinese HSBC PMI data.
Now the currency faces the Reserve Bank of New Zealand's monetary policy announcement at 21GMT. According to Kathy Lien, Co-Founder at BK Asset Management: "At the last meeting, the RBNZ expressed specific concerns about the level of the New Zealand dollar. Central Bank Governor Wheeler talked about how the currency is overvalued and warned of intervention but any currency intervention is expected to be covert because they are only looking to "take tops off dollar peaks where possible."
Kathy adds: "While the slowdown in the region and the recent earthquake increases the risk of a rate cut by the RBNZ, we feel that the economy has not deteriorated enough to warrant easing. Therefore at most, we expect dovish comments from the central bank, which could still be enough to undermine the recovery in the NZD/USD."
Now the currency faces the Reserve Bank of New Zealand's monetary policy announcement at 21GMT. According to Kathy Lien, Co-Founder at BK Asset Management: "At the last meeting, the RBNZ expressed specific concerns about the level of the New Zealand dollar. Central Bank Governor Wheeler talked about how the currency is overvalued and warned of intervention but any currency intervention is expected to be covert because they are only looking to "take tops off dollar peaks where possible."
Kathy adds: "While the slowdown in the region and the recent earthquake increases the risk of a rate cut by the RBNZ, we feel that the economy has not deteriorated enough to warrant easing. Therefore at most, we expect dovish comments from the central bank, which could still be enough to undermine the recovery in the NZD/USD."