1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

New Zealand Interest Rate Statement

Discussion in 'Economic Indicator Descriptions' started by Felix Homogratus, Dec 7, 2009.

Thread Status:
Not open for further replies.
  1. Felix Homogratus

    Felix Homogratus Commander in Chief

    Joined:
    Oct 1, 2007
    Messages:
    153
    Likes Received:
    5
    New Zealand interest rate statement decision comes out once every 45 days.

    When the economy in New Zealand is doing well, the flow of money becomes fast, and prices for goods and services start rising. This is called inflation. In order to keep inflation in check, New Zealand government raises interest rates, which means for every dollar that the banks borrow from the government, they have to pay more.

    The higher the government interest rate, the higher are the bank rates, so it becomes more expensive for people to borrow money for houses, cars, business equipment, et cetera. That cools down the economy and reduces inflation. As soon as the economy is slow, the government tries again to bring it back to normal, so it starts cutting interest rates. This means that people can borrow money from banks cheaper now, and the monthly payments on houses, cars, business equipment, et cetera, become smaller.

    When New Zealand increases interest rates, the demand for the New Zealand Dollars increases, because people from all over the world start investing into the country’s Certificates of Deposit (CDs). Based on this, traders speculate that the price of NZD/USD will go up.

    Whenever there is an unexpected hike of interest rates, it is usually good for the New Zealand Dollar, so NZD/USD tends to go up. Whenever there is an unexpected cut or hold of interest rates, it is usually bad for the New Zealand Dollar, so NZD/USD tends to go down.

    If you want me to email you 1 day before this report is released, and explain to you in details on how to trade it, then please sign up for my free trading signals by going to this link:
    Forex Daily Trading Signals - Forex Peace Army Forum

    In the signal, I tell you exactly how many pips the currency will most likely move, depending on the difference between expected and actual numbers.
     
    DeepakO likes this.
Thread Status:
Not open for further replies.

Share This Page