Overview of NZD/USD

On Thursday the worst results from the pairs showed the New Zealand dollar. Initially, after the RBNZ cut interest rates, NZD/USD rose, as investors hoped, that the decline will be by 0.50% instead of 0.25%. However, when all has settled, market participants realized, that the RBNZ is not only lowered the interest rate to 2%, but warned about their plans to reduce the rates further. Chairman Graham Wheeler decided, that there is no need to cut rates by 0.5% now, but has made it clear, that a further easing is needed. Exactly "needed" rather than "may need". In the forecasts of RBNZ is inherented a decline of 0.6%, so a further reduction by 0.25% in this year is quite possible, especially if the NZD/USD does not register a fall. The Thursday's growth of quotations was completely unjustified, but Friday's pullback corresponded to the fundamental logic. The main objective for reducing the rates by the Reserve Bank's officials were weakening of NZD positions, so they will continue to say and do everything possible to send the currency down. NZD/USD will soon be close to the level of 71 cents.