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NZD USD Could Drop if Rates are Cut

By:   James Hyerczyk
  • 22-07-2008
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The NZD USD is facing downside pressure as traders await the next interest rate decision from the Reserve Bank of New Zealand on July24.

Speculation is building that the RBNZ will reduce its target lending rate for the first time since 2003.

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.

The consensus, however, is anticipating that New Zealand central bank Governor Alan Ballard will keep rates at a record high to fight inflation in the face of a recession.

It looks like it is all coming down to a battle between the speculators and the consensus.

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Next Analysis: USD recovers on hawkish comments from Fed's Plosser and renewed equity rally. Key RBNZ rate decision on tap.
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.


DISCLAIMER:
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