Some fuel for NZD

The Reserve Bank of New Zealand left interest rates unchanged at 1.75% yesterday. Although the central bank felt that the currency needed to fall still further to balance growth, and monetary policy should remain adaptive for a considerable time, officials also said that inflation should grow in the coming months. Now they believe that the consumer price index will return to the goal in the medium term, rather than gradually, and GDP growth in the fourth quarter was weak partly due to time factors. Therefore, their position on the prospects for growth is positive.
RBNZ began to tighten its position in the last few meetings, and therefore I think that the New Zealand dollar should grow. Today there will be data on the trade balance of New Zealand, which can provide support for the currency, as a sharp improvement in the mood of entrepreneurs should lead to increased trading activity.

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.

The euro with a decline in anticipation of data on Friday

On Thursday, EUR/USD decreased, erasing gains from the previous day. The currency pair was traded between 1.1369 and 1.1429 before settling at 1.1376, registering a decline of 0.42%.
The British pound ended almost unchanged against the US dollar, though it was traded in a wide range between 1.4528 and 1.4405, ending the day at 1.4448. BoE did not brought surprises and left its main interest rate unchanged at 0.5%.
The pair USD/JPY rised to 109.01. Purchases of dollars against the yen resumed amid readiness of the Japanese Central Bank to intervene in financial markets.
The Australian dollar finished lower against the US money and AUD/USD closed at 0.7324 while NZD/USD closed unchanged at 0.6812.
On Thursday, gold futures fell, ending the session at $1263,29 per ounce.