Tomorrow at 0200 GMT (24/6/2020), the Royal Bank of New Zealand is releasing their interest rate decision. The interest rate decision is based upon business and economic conditions in New Zealand, and typically provides an outlook for coming economic conditions. The consensus is that the interest rate will remain unchanged at 0.25%, the all time low. At the start of 2020 interest rates in New Zealand were at 1.0%, however that was prior to the economic downturn caused by the Coronavirus pandemic.
Typically a higher interest rate is positive for the NZD, and a lower interest rate is seen as negative. Regardless of the interest rate decision that the RBNZ releases tomorrow there is no certainty as to how the market will react. It is important for NZD traders to note the time and date of the event, as the RBNZ Interest Rate Decision is classified as a “high impact event”, typically resulting in increased volatility across NZD currency pairs.
RBNZ Rate Statement
The interest rate decision is accompanied by the RBNZ Rate Statement, containing an explanation of the decision. The Rate Statement comments on economic conditions and gives an insight into the expected future conditions.
Fundamental traders are able to gain insight into the New Zealand economy by reading the contents of the RBNZ Rate Statement report.
Currently NZDUSD is trading around 0.647, and seems to be making a corrective move in an uptrend.