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

Early Wednesday at 02:00 GMT market sees the key monetary policy decision by the Reserve Bank of New Zealand (RBNZ) amid hopes of another hawkish play by the New Zealand central bank, despite doves flexing muscles of late.

RBNZ is up for fueling the market moves with its 12^th consecutive rate hike, expectedly worth 0.25%, during early Wednesday. The Interest Rate Decision will be accompanied by the RBNZ Rate Statement which can provide further details on the central bank’s next moves, making it crucial for the NZD/USD pair traders to watch. Furthermore, RBNZ Governor Adrian Orr’s presser at 03:00 GMT also amplifies Wednesday’s importance for the Kiwi pair traders.

Ahead of the event, Australia and New Zealand Banking Group (ANZ) said,

On the same line, FXStreet’s Dhwani Mehta said,

How could it affect NZD/USD?

NZD/USD portrays the typical pre-RBNZ inaction after falling the most in a week the previous day. In doing so, the Kiwi pair also pays little heed to the latest first quarter (Q1) New Zealand (NZ) Retail Sales.

Given the clear early signals of witnessing a 0.25% rate hike, the NZD/USD may offer no major reaction to the RBNZ’s rate hike if it matches the market consensus and lifts the peak rate forecasts unchanged. However, recent concerns that the inflation is still too high, despite easing of late, join the fears of more price pressures due to the nation’s “no frill” budget, to keep the RBNZ hawks hopeful and hence any surprise 0.50% rate hike could provide a tailwind to the Kiwi pair.

Apart from the interest rates, the economic forecasts and language of the RBNZ Rate Statement will also be the key for the NZD/USD pair traders to watch.

Technically, a fortnight-old symmetrical triangle restricts immediate moves of the NZD/USD between 0.6225 and 0.6270 as RSI, as well as the MACD, teases bears.

Keynotes

NZD/USD stays bearish around mid-0.6200s on downbeat NZ Retail Sales, RBNZ, Fed Minutes eyed

NZD/USD Price Analysis: RBNZ in focus, bears are engaged

About the RBNZ interest rate decision and rate 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 explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.