The Reserve Bank of New Zealand has decided to leave its interest rates at the current levels, but may experts expect that the New Zealand central bank will be the first major central bank to start raising interest rates and this could happen in March during the next central bank’s meeting.
The markets were already expecting rates to stay unchanged; it was really no surprise in general. According to Donald W., currency strategist at the Binary Options Broker Optionova, the possibility that the central bank will raise the rate in January was at the level of 30%. The bank expects that the RBNZ will start to raise rates in March and assessed the possibility of developing such a scenario at the level of 60%.
According to the analysts of the Binary Options Broker Optionova, they think that if any policy change will take place, it will most probably happen in March, because by then the central bank will be better informed about the real state of the economy. Based on this, the central bank will be able to explain their decisions using economic forecasts and "detailed narrative." In Binary Options Broker Optionova, they also believe that such prospects will support the New Zealand dollar. The bank also expects that the failure of the rate increase in March will cause confusion among the majority of investors, but this fact does not change their expectations of imminent tightening of monetary policy.
In the meantime, New Zealand is still showing some expansion in its economy. By the end of 2013 the number of construction permits reached 21,300, showing an annual growth of 26%. Analysts say that the reading was the highest for the period since 2007. The main growth driver was the increase in the number of permits acted in Canterbury (annual growth of 43% or 5762) and Auckland (annual growth of 38%, or 6309).
The amount of expenses in the construction sector has risen. In general, the reading was 12.1 billion dollars, which would exceed the previous year by 20%. The volume of construction of residential facilities totaled 7.9 billion dollars; an increase of 28%, while for the commercial units the planned cost was $4.2 billion, an increase of 6.9%.
The results of the meeting by the Reserve Bank of New Zealand had a negative effect on the New Zealand Dollar. The NZD/USD pair is decreasing in the bearish wave A/B level daily. "Key supports are pivot MF 0.8116 and the low of 0.8083, a break of which will start a long-term downward trend," – said the experts of the Binary Options Broker Optionova (rated among the TOP Binary Option Brokers of the Masterforex-V World Academy). A rise above the high of 0.8431 will show the start of rising wave A/B level, supposedly, Weekly2. Key resistances will be Fibonacci levels 0.8472/88 and the 0.8542 high.
