NZDUSD Fundamental Analysis – February-29-2024

The New Zealand dollar weakened, reaching lows not seen in almost two weeks. This occurred after the Reserve Bank of New Zealand decided to maintain the status quo on interest rates. They presented a monetary policy perspective less aggressive than what investors had anticipated. Previously, the currency had shown different performance expectations.

NZDUSD Fundamental Analysis: Monetary Policy Stance

For the fifth consecutive time, the interest rate remained at 5.5%. This decision met the general market predictions. The central bank has made strides in tackling inflation, leading to an adjustment in the anticipated rate peak. It has been revised to 5.6% from an initial 5.7%. Consequently, the likelihood of an interest rate increase in May has diminished significantly.

Future Economic Expectations

Adrian Orr, the Governor of the RBNZ, expressed confidence. He believes the prevailing official cash rate is effectively curbing demand. He also anticipates that inflation will stabilize within the desired range of 1% to 3% this year. This assertion has influenced market expectations and forecasts regarding New Zealand’s economic direction.

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Ethan O. Miller

Ethan O. Miller is a seasoned Forex analyst. His insightful articles offer a unique perspective on currency trends, aiding both novice and experienced traders in navigating the Forex market.

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