The New Zealand strengthened against the U.S dollar after the Reserve Bank of New Zealand left the official cash rate at 2.25% Thursday and signaled further easing may be needed as well as a need to ease upward pressure on the currency.
The RBNZ said “further policy easing may be required to ensure that future average inflation settles near the middle of the target range.”
The statement, according to Capital Economics, sets the tone ahead.
“We don’t believe that the slightly more positive tone of the policy statement released after the Reserve Bank of New Zealand (RBNZ) left interest rates on hold at 2.25% today will prevent the Bank from cutting rates to 2.0% at the meeting in June,” Capital Economics said in a note to clients.
“What’s more, we think that the RBNZ will have to go one step further and reduce rates to 1.75% later this year.”
Intra-day bias remains on the upside as 21 and 55 is crossed northward with SSRC trend oscillator signalling more bullish momentum is expected in the pair. Am expecting further rise to 0.7050 high if we get a confirm break of 0.6988 resistance.