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NZ dollar rangebound ahead of RBNZ rate announcement

Wednesday 27th March 2019

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The New Zealand dollar remains steady ahead of today's cash rate review where the Reserve Bank of New Zealand is widely expected to keep rates on hold.

The kiwi was trading at 69.11 at 8am in Wellington, unchanged from 5pm in Wellington yesterday. The trade-weighted index was at 74.80 points from 74.76.

The central bank is due to publish its rate decision at 2pm today and is expected to keep the official cash rate at a record low 1.75 percent. The statement will be closely scrutinised for any hints about whether the next move might be up or down. 

"Markets expect the RBNZ to remain on hold but will be eager to see if their statement has changed since February," said ANZ FX/Rates Strategist Sandeep Parekh. In February, the central bank said "we expect to keep the OCR at this level through 2019 and 2020. The direction of our next OCR move could be up or down."

Reserve Bank governor Adrian Orr is also giving a speech on monetary policy on Friday.

The kiwi traded at 52.25 British Pence versus 52.34 British pence as Brexit volatility continues. "Given the lack of agreement on anything so far a ‘no-deal’ Brexit appears to be the most likely option, a scenario which the EU Commission is prepared for," said Parekh. 

According to the BBC, MPs have set out details of their plan to consider other Brexit options and the Commons will begin voting on alternatives on Wednesday, in a process likely to continue into next week.

The New Zealand dollar was trading at 96.75 Australian cents from 97.02, at 61.27 euro cents from 60.06, at 76.37 yen from 76.05 and at 4.6411 Chinese yuan from 4.6358.

(BusinessDesk)

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