Kiwi lower into NZ central bank rate decision.
NZD/USD traded lower ahead of the Reserve Bank of New Zealand’s key interest rate decision due Wednesday morning local time, or tonight New York time. Key support seen at 63.00
The New Zealand dollar fell in its local market as traders bet on a rate cut by the Reserve Bank of New Zealand (RBNZ) a decision about which will be announced at 9pm New York time today. New Zealand is the first world forex market to open, with trading about 30 pips lower in volatile trade at the open.
Downward pressure in NZD/USD has been overwhelming in recent days ahead of a much anticipated interest rate decision by the RBNZ. Kiwi has fallen over 150 pips in the last seven trading sessions, trading around 63.40 early in New York action.
Traders betting on a rate cut
Traders appear to be betting heavily on a rate cut despite indications from the forward interest rate markets that the odds of such a move are substantially less, about 60% late last week, in the wake of improvement in China/US trade tensions, which has sent world stock markets soaring and brightened the economic outlook worldwide.
Still, expectations appear to be for a 25 basis point cut to 0.75%. The US Federal Reserve has put its own easing efforts on hold, partly due to easing trade tensions.
In August, the RBNZ surprised markets by lowering its key overnight money rate by a larger than expected 50 basis points.
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