Following the statement of Reserve Bank of New Zealand (RBNZ) and subsequent speech of central bank’s governor Graeme Wheeler, New Zealand currency jumped on clear signal of a pause in rate adjustments.
The Official Cash Rate remained unchanged at 3.50% and Wheeler hinted a “period of stability” in central bank’s interest rates. Next focus turned to inflation but already priced-in short-term outlook did not provide any effect on currency and Wheeler calmed the market even when stating that Auckland housing market price development is not expected to have negative impact. It is mostly about oil price drop and as it fades away, inflation will pick up.
Wheeler thus called the statement neutral and it really was. Market reacted only to stability in rates and currency corrected upwards to jumps above $0.7300 level.
Now we may expect it to reach the first resistance at $0.7376, while another stronger level stays at $0.7556. In case of downward movement, we can see the support set near $0.7200 level at 2011 lows.
