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Tomorrow at 9:00 pm GMT the Reserve Bank of New Zealand (RBNZ) will print its monetary policy decision for the month of November.

Will the central bank go for three and implement its third interest rate cut this year? Here are four things you need to remember:

The last policy decision was in September

After cutting rates to a record low of 2.00% in August, RBNZ Governor Graeme Wheeler and his team have taken a breather and kept their rates steady in September.

NZD's 1-hour Forex Charts during the RBNZ's September Decision
NZD’s 1-hour Forex Charts during the RBNZ’s September Decision

It’s not that the RBNZ was less worried about the economy. In fact, the central bank noted that “a decline in the exchange rate is needed” as it puts pressure on the trading sector.

In addition, its outlook for long-term inflation remained subdued, as persistent risks to headline inflation (e.g. lower fuel prices) causing regular downward revisions for the RBNZ’s expectations.

Overall, the RBNZ’s tone supported speculations that another rate cut is on the table.

RBNZ may have painted itself into a corner

With New Zealand’s GDP coming in better-than-expected; Q3 2016 inflation report surprising to the upside; global inflation seeing green shoots; dairy and other commodity prices recovering from their 2016 lows, and the housing market still unstable, some analysts believe that the need for the RBNZ to cut its rates further have diminished.

Unfortunately for the central bank, it has painted itself into a corner after it changed its tune from “further policy easing may be required” in June to “further policy easing will be required” in its August and September statements.

Simply put, at this point, the RBNZ would NEED to cut its rates or risk boosting the Kiwi further with its sudden shift in policy bias.

So while the RBNZ will still likely to follow through on its threats to cut its rates to a record low of 1.75% this week, it’s likely that it will also soften its easing bias, recognize economic improvements but keep the pressure to limit the Kiwi’s gains and help keep inflation expectations afloat.

The U.S. elections could also factor in the decision

Don’t forget that the U.S., the world’s largest economy, will also choose its next President this week. After months of anticipation and if the EU referendum is any indication, we’ll likely see monster moves across ALL major currencies including the Kiwi.

The RBNZ could also choose to hold their firepower depending on the potential impact of the next President’s policies. Make sure you read the 3 market tendencies around the U.S. election!