New Zealand Dollar Spikes After The Hawkish RBNZ Decision

The New Zealand dollar has risen following the latest interest rate decision by the country’s central bank. The bank left the Official Monetary Rate (OCR) unchanged at 0.25%. It will also continue with its policies on large-scale purchasing and lending financing programs. It also promised to leave interest rates up to the current level until inflation rises to 2% and the unemployment rate falls. The bank noted that the country’s economy has recovered strongly, but the tourism and hospitality sectors have not yet recovered. It also deplored the rising cost of goods while growing raw materials and noted that its LSAP program is unlikely to hit its $ 100 billion target by June 2022. Earlier, data from the country showed that exports had declined to $ 5.37 billion. dollars on imports fell to 4.98 billion US dollars in April.

The U.S. dollar index rose slightly in the sudden session after the U.S. released strong domestic prices. According to the Case-Shiller National Domestic Price Index, prices rose 13.2% in April, the fastest growth since December 2005. This was an increase from the previous 12%. The average price of a new home was $ 372,000, 20% higher than in April 2020. This performance is largely due to low interest rates, high demand for homes and the rising price of timber. Wood prices have more than tripled in the past 12 months. Analysts expect continued supply and demand dynamics to continue to push prices higher.

The economic calendar will be relatively muted today. In Switzerland, ZEW will publish its numbers on business expectations, while in the US we will receive the latest mortgage data. In Mexico, the country’s statistical agency will publish the latest GDP data. Other important events will be the latest data on U.S. inventories of crude oil and a statement from Richard Quarles of the Federal Reserve. Stock traders will also react to the latest earnings from Nvidia, Pinduoduo, Niger, and Labor Day, among others.

NZD / USD

The NZD / USD pair jumped to a high of 0.7295 after RBNZ’s latest interest rate decision. On the four-hour chart, the pair has approached its current high of 0.7300. It also moved above the 25-day and 15-day moving averages while the Relative Strength Index (RSI) and MACD also grew. It also canceled the pattern of head and shoulders that had formed earlier. Therefore, the pair may grow as bulls try to move above the current high.

EUR / USD

The EUR / USD is hovering around its highest level this year as investors react to the latest data on U.S. house prices. On the four-hour hourly, the price is approaching the top side of the rising channel, having risen more than 3% from March this year. It is also above the 25-day moving average and the Ichimoku cloud. Therefore, the pair may grow with the next key target at 1.2270. The pair can also retreat when bears target the underside of the channel.

AUD / NZD

The AUD / NZD pair declined sharply after a relatively sharp RBNZ decision. On the four-hour chart, the pair has declined to a low of 1.0655, the lowest level since March. It also exploded below the major support at 1.0692 and the 25-day and 15-day moving averages. The MACD also declined below the neutral line. Therefore, the pair may fall as bears target the next key support and 1.06550.