The New Zealand Dollar hits its two-week high on Thursday’s early trades due to the central bank signals of a nearer and faster inflation and interest rate growths.
According to reports, the Reserve Bank of New Zealand maintained the interest rates at the record low of 1.75 percent. However, the bank added that it estimates that the inflation will recover around its 1-3 percent approximation. This resulted to a surge in the trading performance of the Kiwi Dollar as it hit its 2-week high of as $0.6974 from its recent close of $0.6898.
Governor Grant Spencer stated on reports that the policies offered by the new Labor government could improve the economic growth by about half a percentage point in the coming years.
"More interesting than the RBNZ having now left interest rates unchanged for a year, was the Bank's verdict on the impact of the new government," Economist Paul Dales told reports. "It believes that GDP growth will be fast for longer, inflation will be higher, the unemployment rate will be lower and interest rates may have to rise a bit earlier in 2019."
The Kiwi dollar struggled after the recent Labor coalition victory. Investors showed concerns in its left-leaning policies which can potentially slow the economic growth along with the foreign investment.
According to sources, investors will be watchful of the Reserve Bank of Australia’s quarterly report as such can provide further hints on the trend of interest rates.
The RBA maintained its interest rates at a record low 1.50 percent for beyond a year and may perhaps remain on hold for one more year.
The Government Bond of Australia rebounded as well at the time being, with the three-year bond contract declining by 2 ticks at 98.030. The 10-year contract was seen having less 3 ticks at 97.3800 for the time being.
At the time of writing, The New Zealand Dollar’s trade against the US Dollar has remained on the 0.69 level. The pair has been struggling to maintain bulls and there’s a chance that the bears may dominate the pair for today’s trades. However, it is expected to maintain its bullish performance considering the optimism above.
As for the Relative Strength Index, it remained flat in its recent trades. It was at 45.96 with having no signals of potential uptrends at the time of writing.
And lastly, the Coppock curve of the pair remained bullish in its recent sessions indicating that the pair is indeed having an increase. It is at 3.44 at the time being which would recommend a sell for the pair but with the optimism above, a hold would be much preferred.
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