Reserve Bank of New Zealand, NZD / USD, monetary policy, LSAP – call points
- RBNZ keeps the cash rate overnight at 0.25% as expected
- Large-scale stock purchases (LSAP) will be suspended this month
- NZD / USD climbs over technical barriers if the price climbs more than 1%
The Reserve Bank of New Zealand (RBNZ) kept its overnight money (OCR) stable at 0.25%, as generally expected. However, the central bank moved to suspend the purchase of its large-scale assets (LSAP) by 23 July. The end of this quantitative easing program marks a major turning point in reducing economic stimulus.
The New Zealand Dollar after crossing the wires of the monetary policy statement (MPS) saw great strength as traders assessed hawkish policies quickly. Optimistic economic conditions higher than RBNZ’s estimated targets were the main reason for the rebound. Nevertheless, RBNZ members remain cautious about the volatile situation surrounding the ongoing pandemic and agree that a sustained incentive is needed to achieve its objectives.
House prices were being addressed as MPS saw the late growth rate as “unsustainable”, although some upward pressure has eased. Elsewhere, prices are rising in the June and September quarters, but are considered temporary due to factors caused by the pandemic, such as limited supply.
New Zealand dollar technical forecast
NZD /USD jumped a full percentage point higher, climbing above its 20-day Simple Moving Average (SMA) and high trend trend in May. Both MACD and RSI oscillators point higher, reflecting a sudden upward movement. On the downside, the recently broken trend line may provide price support. Alternatively, bulls may target the June high of 0.7095.
New Zealand dollar daily card
The chart is created using TradingView
New Zealand Dollar TRADE RESOURCES
– Written by DailyFX.com analyst Thomas Westwater
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