NAB FX Strategy Research expects that this Thursday’s RBNZ monetary policy statement won’t likely offer much support for the NZD as the underlying message will be that the RBNZ is in no hurry to join some other major central banks in looking to remove policy accommodation.
“We doubt the RBNZ will up the rhetoric on the NZD. At the June OCR Review, when the NZ TWI was trading close to the current level, the Bank stuck to the facts, noting the prior increase in the TWI, partly explained by higher export prices. The Bank merely suggested that “a lower NZD would help rebalance the growth outlook towards the tradeables sector”. We expect similar language.
Overall, the Bank’s Statement should read slightly more dovish than the May Statement, but this shouldn’t surprise the market. From a relative monetary policy perspective the Bank’s stance likely won’t be lending any support to the NZD through the rest of the year,” NAB argues.
Source: NAB Research
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