THE TAKEAWAY:NZD RBNZ Rate Decision (Jan) > OCR Unchanged at 2.5% > Economic Growth Expected to Improve > NZDUSD Slightly Bullish
The Reserve Bank of New Zealand left the Official Cash Rate (OCR) unchanged at 2.5%. RBNZ Governor Graeme Wheeler stated: “Global growth is set to recover in 2013 with economic indicators improving in many of our trading partners. Consistent with this, global financial market sentiment is positive, contributing to lower bank funding costs and some reduction in interest rates faced by households and firms in New Zealand.” New Zealand inflation remains just below the bottom of the Reserve’s target range. The high currency is suppressing inflation on traded goods, while undermining profitability in export and import competing industries.
Economic growth is expected to strengthen through 2013, reducing spare capacity and bringing inflation back towards the 2% target midpoint.
NZDUSD 1-minute Chart: January 30, 2013
Chart from FXCM Trading Station, created by Courtney Edwards
The NZDUSD rose slightly at the expected OCR release. Earlier today, the pair hit a cross down of 0.95% at 0.8314, facing the next support at 0.8280 (low Jan. 28) ahead of 0.8265 (daily cloud base) and then 0.8245 (TL off Nov. low). On the upside, a break above 0.8355 would clear the way to 0.8375.
--- Written by Courtney Edwards, DailyFX Research