The RBNZ keeps toughening its monetary policy in April. This is happening through interest rate hikes, which was anticipated by many financial experts. At the same time, the central bank improved the GDP forecast for the closed financial year. Graeme Wheeler mentioned the necessity of further interest rate hikes in the near future.
RBNZ Plans Further Hikes
According to the results of the recent RBNZ meeting held in April, the central bankers decided to raise the benchmark interest rate by 0,25 percentage points up to 3%. During the press conference that followed the meeting, Graeme Wheeler said he was content with the pace of economic growth in New Zealand and underlined tougher cooperation with the country’s major partners and acceptable financial conditions on a global scale.
At the same time, Mr. Wheeler mentioned the necessity of higher interest rates in the near future. The hikes are necessary to reach the comfortable level, where there would be no need in further interest rate hikes. According to him, the list of the key factors influencing further interest rates decisions made by the RBNZ will include major economic figures as well as inflation pressure set by the RBNZ with a glance at high exchange rates. At the same time, faster economic growth and inflation turned out to be the key decision makers during the latest meeting. April is the second month in arrow when the central bank makes such a decision to raise the rates. Still, weak inflation may force the central bankers to change their mind.
Forex: NZDUSD
Meanwhile, the New Zealand Dollar is showing almost no reaction to the interest rate hike initiated by the RBNZ. The currency pair (NZDUSD) is still forming a bearish move represented by wave A/B of level Daily, Masterforex-V Academy reports.
At this point, the currency pair is probably developing sub-wave b(C ). A break below the local low at 0.8545 is going to indicate that the development of the mentioned wave A/B is still underway.
The closest levels of support are located at 0.8528 as well as 0.8511/09, 0.8479/76. The current bearish move will be completed only if the price manages to break below the top of the MF sloping channel and consolidate above 0.8635.
