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NZ raises rates by 25bps: Buy the rumour, sell the fact

By   || July 28, 2010 at 22:03 GMT
|| 2 comments || Add comment

As we reported yesterday, a Bloomberg survey of 14 economists unanimously predicted this mornings 25 bps rate rise to 3.00%. The NZD/USD fell 70 pips immediately after the announcement and has been unchanged for the last hour at .7210. AUD/NZD is back above hourly resistance at 1.2350.

(Edit) Further hikes are expected to be more gradual and hence the sell-off in the NZD.

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2 Responses to “NZ raises rates by 25bps: Buy the rumour, sell the fact”

  1. dafx on July 28th, 2010 22:05 GMT

    thanks
    I remember also a good selloff after tha latest AUD rate increase
    maybe that indicates the last rate increase for NZD also.

  2. Jeff on July 28th, 2010 22:44 GMT

    in that case I think investors worry about growth prospects and moved their funds elsewhere.
    Usually an increase in interest rates will tend to raise the exchange rate.

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