The Reserve Bank of New Zealand(RBNZ) is set to raise its interest rate for the 12th consecutive time in an effort to tame the looming inflation destroying the economy. The interest rate was kept elevated at 5.55% and could probably be pushed higher by some basis Points.
Currently, inflation is red hot and rising at its fastest pace in a 32 years track record. According to Stats NZ, the New Zealand inflation rate sits high at 6.7 percent, leading to economic overheating and soaring prices. This soaring inflation is driven by rising food prices and the housing market, a level not seen since the 1990s.
As the expectation for monetary policy tightening heightens, the New Zealand dollar could possibly hold firm in gains in response to buyers’ strong move.
On the NZD/USD 4-hour time frame, the price could possibly push towards the 0.63800 resistance mark.
On the downside, if the buyers lose momentum, the price could drop toward the support point as signaled in the “Ichimoku cloud”.
NZD/USD chart.
Regardless, traders should brace themselves up for a period of high volatility as the Official Cash Rate (OCR) reports often have a great impact on the FOREX market. An increase in Cash Rate will usually strengthen the NZD (New Zealand Dollar), while a decrease in Cash Rate will usually weaken the NZD (New Zealand Dollar).
Traders should always be aware that volatile markets provide great opportunities for making profits, as the increase in volatility can cause market swings for traders to capitalize on.
The currency pairs that include the NZD (New Zealand Dollar) are mostly affected by the data release. The pairs include: NZDUSD, AUDNZD, EURNZD, GBPNZD, NZDCAD, NZDJPY etc.
Time Schedule for the Official Cash Rate Report:
Date: Wednesday. 24th May 2023.
Time: 3:00 am (GMT + 1).
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