Tag: RBNZ

Is the NZD rally justified despite RBNZ rate cut in Dec’2015?

Is the NZD rally justified despite RBNZ rate cut in Dec’2015?

Financial Markets Explained
The Reserve Bank of New Zealand met on December 9th for its final monetary policy review for the year. Heading into the RBNZ's monetary policy event, the markets were widely divided on whether the New Zealand Central bank would cut rates or not, given that the it is an almost certainty that the US Federal Reserve would hike rates at the meeting on December 17th. However, the RBNZ did indeed deliver a 25 bps rate cut, bringing the overnight cash rate from 2.75% previously to 2.50%. In the monetary policy statement from the RBNZ which can be read here, the Central Bank noted that it felt justified that the current rate cut would help New Zealand's inflation move back into the 1.0% - 3.0% target range by mid 2016. The Central bank also accepted the view that inflation will remain weak in t...
AUDNZD – A potentially juicy trade setting up

AUDNZD – A potentially juicy trade setting up

Technical Analysis
The Aussie dollar has been prone to some wild swings this week. It all started off few weeks ago with the RBA Governor Glenn Stevens giving a speech to the Australian American Association in New York. In his comments, the RBA Chief made indirect reference to the 'high exchange rate' of the Australian Dollar and that further rate cuts were on the table and something which the Australian Central Bank could dig into if need be. These remarks sent the Aussie plummeting sharply and once again arousing speculation of May rate cuts. You can read The World Economy and Australia from the RBA website. Then a couple of days, sentiment in the US soured and with the GDP numbers disappointing for the quarter (they weren't really, if you consider the bigger picture, but that's a different story), t...