The RBNZ is expected to hold rates at 1.00% at 0100 GMT
Long gone are the days of 8% overnight rates in New Zealand. Instead the near-ZIRP policy at the RBNZ is expected to continue with all 24 economists in the Bloomberg poll forecasting no change.
RBC is among those seeing no change and here is what FX strategists there have to say today:
The RBNZ is universally expected to keep the policy rate unchanged at 1.00% (decision & MPS: Tue 20:00 ET/ Wed 09:00 HKT; press conference: Tue 21:00 ET/ Wed 10:00 HKT). Beyond this meeting, we think that the more than 50% probability that markets attach to a rate cut in 2020 looks high given the RBNZ now appears to have a default position of unchanged rates unless the data deteriorates sufficiently to change that. As yet, there is no sign of that. Measures of domestically generated inflation are still above the RBNZ's target and growth has been coming in around trend recently. The labour market continues to tighten with the unemployment rate at a post-GFC low in Q4.
NZD/USD is up 18 pips to 0.6402 today.
