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New Zealand Dollar Tumbles Lower
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New Zealand Dollar Tumbles Lower Despite RBNZ Half-Point Hike
The New Zealand Dollar surprisingly tumbled over 1% lower against its US counterpart in the aftermath of the RBNZ monetary policy meeting, despite the central bank delivering its biggest interest rate hike in 22 years. The RBNZ’s monetary policy committee raised the official cash rate to 1.5%, in line with the majority of market participants’ expectations. Indeed, futures markets assigned a 70% chance that the central bank would deliver a half-point rate hike to fight a surge in consumer price growth. This is likely why the currency didn’t meaningfully appreciate following the central bank’s announcement.To get more news about vital markets, you can visit wikifx.com official website.
After all, an aggressive 50-basis point hike from the central bank now diminishes the chances of a larger rate rise in the future. Moreover, the central bank reiterated its comfortability with the trajectory for the official cash rate announced in February, with policymakers signalling that the benchmark rate won’t be taken any higher than 3.25%. Compounding the bearish outlook for the local currency is the outbreak of the Omicron variant of the coronavirus, which is weighing on household confidence and spending. Therefore, the Kiwi Dollar could be poised to extend its recent slide lower against the US Dollar despite the RBNZ leading the global monetary policy normalization charge.
Technically, the outlook for NZD/USD appears bearish in the short-term as prices snap the uptrend extending from the yearly low and slice through key support at the 0.6900 mark.
With the RSI sliding back below its neutral midpoint, and the slopes of the three short-term moving averages notably point lower, the path of least resistance seems skewed to the downside.A daily close below the 100-MA (0.6782) would probably intensify selling pressure and bring psychological support at 0.6700 into focus.
However, should support remain intact, a short-term rebound to retest support-turned-resistance at the 34-EMA (0.6852) could be on the cards.Vantage Global Prime Pty Ltd is authorised and regulated by the Australian Securities & Investments Commission (ASIC) AFSL no. 428901. Vantage Global Prime Pty Ltd is the issuer of the products described on this website and Product Disclosure Statement (PDS) and is authorised to provide financial services in Australia.
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This post was edited by Elis White at March 29, 2023 8:55 AM EDT