Press "Enter" to skip to content

RBNZ Preview: NZDUSD Rate to Eye Monthly High on Wait-and-See Policy

Trading the News: Reserve Bank of New Zealand (RBNZ) Interest Rate Decision

The Reserve Bank of New Zealand (RBNZ) interest rate decision may fuel a larger rebound in NZDUSD as the central bank is expected to keep the official cash rate (OCR) at the record-low of 1.50%.

In fact, the record of the May meeting suggests the RBNZ is in no rush to implement another rate cut and will revert back to a wait-and-see approach for monetary policy as “the Committee agreed that the projections adequately captured the observed global slowdown and its impact on domestic employment and inflation.

With that said, fresh comments coming out of the RBNZ may keep NZDUSD afloat over the remainder of the week if the central bank tames speculation for lower interest rates.

However, the RBNZ may endorse a dovish forward guidance as officials insist “a lower path for the OCR over the projection period was appropriate,” and the policy statement may rattle the near-term rebound in the New Zealand Dollar if the RBNZ shows a greater willingness to implement another rate cut in 2019.

Sign up and join DailyFX Analyst David Cottle LIVE to cover the RBNZ interest rate decision

Impact that the RBNZ rate decision had on NZD/USD during the previous meeting


Data Released



Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)



05/28/2019 02:00:00 GMT





May 2019 Reserve Bank of New Zealand (RBNZ) Interest Rate Decision

NZD/USD 10-Minute Chart

Image of nzdusd 10-minute chart

The Reserve Bank of New Zealand (RBNZ) reduced the official cash rate (OCR) to a fresh record-low of 1.50% in May as “members agreed that given the recent weaker domestic spending, and projected ongoing growth and employment headwinds, there was a need for further monetary stimulus to meet its objectives.” It seems as though the RBNZ will keep the door to further insulate the economy as “trade concerns remain,” but the bank central bank appears to be in no rush to implement a series of rate cuts as the committee discussed “the relative benefits of holding the OCR and committing to a downward bias.”

The New Zealand dollar tumbled to a session low of 0.6525 following the 25bp rate cut, but the initial reaction was short-lived, with NZDUSD paring the losses to close the day at 0.6575. Learn more with the DailyFX Advanced Guide for Trading the News.

NZD/USD Rate Daily Chart

Image of nzdusd daily chart

  • Keep in mind, the broader outlook for NZDUSD is tilted to the downside as both price and the Relative Strength Index (RSI) snap the upward trends carried over from 2018.
  • However, recent price action raises the risk for a larger rebound as the Fibonacci overlap around 0.6490 (50% expansion) to 0.6520 (100% expansion) offers support, with the exchange rate carving a series of higher highs and lows following the failed attempts to test the 2019-low (0.6482).
  • The close above the 0.6600 (23.6% retracement) to 0.6630 (78.6% expansion) area brings the monthly-high (0.6682) on the radar, with the next region of interest coming in around 0.6710 (61.8% expansion) to 0.6740 (23.6% expansion), which largely lines up with the 200-Day SMA (0.6708).

Additional Trading Resources

New to the currency market? Want a better understanding of the different approaches for trading? Start by downloading and reviewing the DailyFX Beginners Guide.

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader series on how to effectively use leverage along with other best practices that any trader can follow.

— Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.