Skip to content NZDUSD Fundamental Analysis – 13-August-2024
The New Zealand dollar climbed to about $0.603 (NZD/USD) as traders looked forward to the Reserve Bank of New Zealand’s (RBNZ) upcoming policy announcement set for Wednesday. Many are curious to see how the central bank will navigate the current economic landscape.
RBNZ Likely to Hold Steady on Interest Rates
It’s widely anticipated that the RBNZ will maintain its official cash rate at 5.5%, marking the ninth consecutive time without a change. This decision comes amidst ongoing discussions about the underlying strength of the New Zealand economy.
Mixed Economic Signals Add to Uncertainty
Recent economic data offers a mixed picture. On one hand, New Zealand’s unemployment rate for the second quarter rose, but not as sharply as predicted. On the other hand, inflation expectations for the third quarter have dropped to their lowest in three years. This decline in inflation expectations strengthens the argument for a potential rate cut in the future.
Market Sentiment Split on Rate Cut Prospects
Market sentiment appears divided. While there is a 69% chance implied by market indicators that the RBNZ might reduce the cash rate by 25 basis points, most economists are predicting no changes in the current rate. This divide highlights the uncertainty in the market and the cautious stance being taken by many experts.
- Also read: AUDUSD Fundamental Analysis – 13-August-2024
Eyes on US Inflation Data for Further Clues
At the same time, global attention is shifting towards upcoming inflation data from the United States, due later this week. This data could offer more insights into the Federal Reserve’s possible moves regarding rate cuts, which could, in turn, influence the RBNZ’s future decisions.
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