Henry Liu
Former FPA Special Consultant
- Messages
- 473
RBNZ (Reserve Bank of New Zealand) will be releasing its interest rate decision today and it is widely expected that Gov. Bollard will keep rates unchanged today at 3.00%; here is the forecast:
3:00pm (NY Time) RBNZ Rate Decision Forecast 3.00% Previous 3.00%
ACTION: NZD/USD BUY 3.25%
The Trade Plan
With current forecast from all 14 economists surveyed by Bloomberg agreeing that RBNZ is likely to keep rates unchanged during this meeting, possibilities of getting in on a trade after the release is not very likely; however, in the event that Gov. Bollard surprises the market by:
1. Hike rates to 3.25%: We should see a strong demand in the NZD immediately, and a spike trade to BUY NZD/USD is recommended using spike trading method.
For more information on my trading method:
Henry's Spike Trading Method
The Market
NZD has been on a rally due to the weaker USD and the general risk sentiment since last week's US NFP release. As it is widely expected for this rate decision to be unchanged due to the recent moderation in inflation and consumer spending, plus recent dry weather could also weigh in on Bollard's decision to tighten NZD's interest rate.
Important Note: It is possible that Gov. Bollard may talk about postponing RBNZ's rate tightening policy until late 2011 due to recent economic slowdown, which will drive NZD weaker immediately. I would definitely be watching out for comments concerning to RBNZ's future monetary policy today.
Additional Thoughts
NZD is a very slow moving currency and for a news of this caliber, decent retracements are not likely. Considering the expectation for this release, if we do get an "as expected", market will be focusing on the accompanied statement.
Also 3:00pm market is usually low in liquidity. Unless we get a surprise, it's probably best to stay out...
Pre-News Considerations
If NZD/USD spikes above the 0.7550 area, I may take a SELL trade. The overall long-term view for NZD is bearish, therefore the direction is definitely for a SELL.
For more information on history charts and data of RBNZ Rate Decision...
Thanks,
3:00pm (NY Time) RBNZ Rate Decision Forecast 3.00% Previous 3.00%
ACTION: NZD/USD BUY 3.25%
The Trade Plan
With current forecast from all 14 economists surveyed by Bloomberg agreeing that RBNZ is likely to keep rates unchanged during this meeting, possibilities of getting in on a trade after the release is not very likely; however, in the event that Gov. Bollard surprises the market by:
1. Hike rates to 3.25%: We should see a strong demand in the NZD immediately, and a spike trade to BUY NZD/USD is recommended using spike trading method.
For more information on my trading method:
Henry's Spike Trading Method
The Market
NZD has been on a rally due to the weaker USD and the general risk sentiment since last week's US NFP release. As it is widely expected for this rate decision to be unchanged due to the recent moderation in inflation and consumer spending, plus recent dry weather could also weigh in on Bollard's decision to tighten NZD's interest rate.
Important Note: It is possible that Gov. Bollard may talk about postponing RBNZ's rate tightening policy until late 2011 due to recent economic slowdown, which will drive NZD weaker immediately. I would definitely be watching out for comments concerning to RBNZ's future monetary policy today.
Additional Thoughts
NZD is a very slow moving currency and for a news of this caliber, decent retracements are not likely. Considering the expectation for this release, if we do get an "as expected", market will be focusing on the accompanied statement.
Also 3:00pm market is usually low in liquidity. Unless we get a surprise, it's probably best to stay out...
Pre-News Considerations
If NZD/USD spikes above the 0.7550 area, I may take a SELL trade. The overall long-term view for NZD is bearish, therefore the direction is definitely for a SELL.
For more information on history charts and data of RBNZ Rate Decision...
Thanks,
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