Ladies
and Gentlemen,
At 10
pm tonight, as the End of Day Reports filter through, the RBNZ announce their
interest rate decision.
All 17
economist surveyed by Bloomberg believe they will cut interest rates by 25
basis point, however in recent days the currency has rallied from 0.6250 to
0.6425, why?
It
looks as if this particular story is more about will they cut 25 basis point
and infer the cutting cycle is over or will bearish Central bank rhetoric
continue, Governor Wheeler holds a press conference immediately after the
announcement.
The
recent Chinese meltdown is not good news for NZ, the June trade date in NZ was
the worst in 6 years and the main reason was exports to China slumped 29%, with
Dairy exports falling 24%.
The
Dairy industry in NZ is not in a good way, employers hiring is at the lowest
pace for 2 years, there is falling consumer confidence, weaker retail sales,
softer manufacturing PMI and poor business confidence. Altogether this makes
for a gloomy picture. Asset price inflation via the housing market is about the
only positive, but not strong enough to avert a cut.
I
personally believe a cut is on the card and that technically 0.6425, 0.6458 and
0.6550 act as good resistance levels
Good
Luck
Anish S. Lal @anish8fx
FX & Precious Metals, Atom8
Financial Services LLP
2nd Floor, Centenary House, Palliser
Road, London W14 9EQ, UK
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