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Reserve Bank of New Zealand Cuts Rates

24-07-2008 - James Hyerczyk  |   Fundamental Reports
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The Reserve Bank of New Zealand cut interest rates by a quarter point on July 24.  This move was anticipated based on the pre-report sell-off.

The NZD USD is at a six-month low and expected to move lower as Reserve Bank Governor Alan Ballard is already indicating that he may cut rates again if inflation eases.

Financial traders are already pricing in another rate reduction in September.

The factors leading up to this rate cut are a slump in consumer confidence and housing that may have pushed the economy into a recession.

Technically, the market broke into a major retracement zone at .7427 to .7241.  Additional support is at the January 22 bottom at .7382 and the October 22 bottom at .7364.

Since the interest rate news was expected, do not be surprised by a short-covering rally if the market can regain .7427 on a closing basis.
Content Provided by:
James Hyerczyk

James A. Hyerczyk is a registered Commodity Trading Advisor with the National Futures Association.

Mr. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor....

 
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