When is the RBNZ and how could it affect NZD/USD?

RBNZ overview

The RBNZ is expected to leave the Official Cash Rate (OCR) at 1.75% at its policy while markets look for an upbeat assessment of the economy, however, this should be a non-event while the FOMC is front and centre today. 

This is acting Governor Spencer’s last meeting before the new governor, Adrian Orr, takes the helm on 27 March and it seems understandable that he would want to give the incoming governor maximum policy flexibility via a neutral statement without strong policy guidance, as noted by analysts at Nomura:

"On the fundamentals, too, we doubt recent developments would have shifted the RBNZ’s thinking in any material sense. Finally, we note that this is a non-policy statement month, so there will not be any new RBNZ forecasts. We pencil in two 25bp rate hikes in H2 2019 but will look to the new governor and any upcoming changes to the Policy Targets Agreement to firm up our view. We do expect the Reserve Bank of Australia (RBA) to hike first," the analysts at Nomura explained.

How could the RBNZ affect NZD/USD? 

Interest rate markets are unlikely to be perturbed by a steady–as–she–goes outcome while, at the same time, the Kiwi has fallen against the dollar since the Feb meeting, from the lofty heights of 0.7436 down to 0.7153, so there is less likelihood that any jawboning will occur this meeting around.  Meanwhile, the NZD/USD has dropped below the key 200-day moving average support at 0.7183 and technicals stay bearish with RSIs biased to the downside while the bird holds below the 10, 21 and 55-DSMAs. Closes need to occur above 0.7320 with the 21-D SMA falling in at 0.7267 and the 50-D SMA 0.7293 as the first major hurdles. 

Key notes:

• RBNZ will not hike until 2020? - Nomura
• NZD/USD: the Fed and the RBNZ to grant action around the pair
• RBNZ OCR Review: Goodbye, Farewell, and Amen - TDS

About the RBNZ interest decision and statement

The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.