NZD/USD: some clues on the outcome of the upcoming RBNZ meeting
There is no need to wait with bated breath for the Reserve Bank of New Zealand’s meeting as there are other important events of this week, but it still matters for those who has far reaching bets on the NZD/USD currency pair. The RBNZ is going to announce its benchmark interest rate this week, on the 22nd of September, and offer its commentary on the health of the NZ economy.
Meanwhile, we dared to take on the job of the RBNZ officials and came up with our own outlook of the NZ economy. Latest statistic data show us that it is running rather good. The unemployment rate decreased to 5.1% in the June 2016 quarter (from a revised 5.2% in the March quarter); GDP, meat and dairy prices have risen more than expected. Last week we had a chance to take a glance at the GDP data, the primary gauge of the national economy’s health. According to statistics, New Zealand’s economy grew a little, but at a slower pace than it was expected. And this growth potential is not running out of steam, since the construction sector of the NZ economy works at its full capacity, rebuilding the country’s biggest city Christchurch and bolstered by the booming housing market. There were some small distortions in the current account data released last Tuesday. It reflects the decrease in New Zealand’s services exports. Spending by international visitors to New Zealand also decreased slightly.
Taking all the data into account, many economists expect the RBNZ to remain the Official Cash Rate unchanged (at 2%) on Thursday, but to cut it in November and then sit on hold for a lengthy period of time.
The NZD/USD increased to 0.73 on Monday from 0.72 in the previous trading session. The NZD depreciated against USD by 0.79% during the last week due to data release by the RBNZ.