So RBNZ cut rates to start the week. What’s next for the Kiwi in the next couple of days? Here’s a list of potential catalysts to watch.
Post-rate cut volatility
- Reserve Bank of New Zealand (RBNZ) just cut its rates by 75 basis points to 0.25% in an emergency announcement
- The move is set to combat the “significant” hit of COVID-19 on the economy
- RBNZ pledged to keep it at this level “for at least the next 12 months”
- Governor Orr hinted that negative rates is not an option at this point, but large-scale asset purchases is
Quarterly GDP (Mar 18, 9:45 pm GMT)
- The economy grew by 0.7% in Q3 2019, higher than 0.1% in Q2 and 0.5% expected
- NZD shot higher at the news and the bulls were able to extend its upswing for the rest of the week
- Analysts see a 0.5% growth in Q4 2019
- Annualized growth could accelerate from 2.3% to 2.4%
Market risk sentiment
- COVID-19 updates and its impact on global economic activity will continue to dominate NZD’s price action
- Scheduled central bank decisions like BOJ’s, the Fed’s, and SNB’s policy decisions as well as any unscheduled policy announcements could also provide volatility for high-yielding bets like NZD
- Top-tier releases like Uncle Sam’s retail sales, Australia’s labor market data, and Canada’s CPI and retail sales may also provide short-term volatility for NZD’s pairs
Technical snapshot
- RSI considers NZD as “overbought” against AUD and “oversold” against EUR, CHF, and USD on the daily time frame
- NZD has been most volatile against JPY, USD, CAD, and CHF in the last 7 days
Missed last week’s price action? Read NZD’s price recap for March 9 – 13!
