According to the results of September meeting Reserve Bank of New Zealand (RBNZ) has reduced exchange rate. Such piece of news and further message had a negative influence on New Zealand currency.
The Central Bank of New Zealand has taken a decision about reduction of exchange rate by one quarter, namely to 2.75%. Such easing of monetary policy is observed after last year’s situation when RBNZ decided 4 times to increase the exchange rate, as commented by analysts to the "Market Leader". Tightening of monetary policy was then happening due to growth of prices for dairy products at Asian markets, boom at real estate market in Auckland, as well as necessity to hold reclamation work in Christchurch.
Lowering of exchange rate in September was rather expected. At the same time, the soft tone of accompanying message appeared unexpected. Graeme Wheeler, governor of RBNZ, has informed about probable further lowering exchange rate, which will be accompanied by decline of national currency. Nevertheless, Wheeler has added that NZD dynamics will to greater extent be defined by current flow of economic data. Market participants were not expecting rhetoric of the head of Central Bank to be so soft.
Speaking about perspectives, economist expect further lowering of exchange rate by RBNZ in the nearest future, its main target being stimulation of inflation and support of economy after drop of prices for dairy products, which is the main export position of New Zealand.
NZD remains in a long-term downtrend. NZDUSD currency pair is forming a “bearish” wave 3/C of not less than Weekly2 level, as highlighted by experts of Masterforex-V Trading System . On 10 September 2015 the pair was within the zone of probable sub-wave С of downtrend. Breakout of MF sloping channel and MF pivot 0.6707 will signal about the end of current wave. Having broken the minimum of 0.6148, the pair will continue current downtrend. Probable targets of the movement are Fibonacci levels 0.5978, 0.5908, and 0.5677.
