Last night the Reserve Bank of New Zealand lowered interest by 25 bp (3% -2.75%) for the third time in a year According to the governor, there might be more easing over the coming month in other to stimulate the economy and most importantly to boost inflation and aid export. He highlighted the risk from china regarding devaluation of Yuan which might call for further monetary action from RBNZ. Although, the economy is growing at 2% annual rate
Bank of Canada left key interest rate unchanged despite recent economic challenges facing Canada’s economy. It will be recalled that the economy is currently in a recession after the GDP figures prints negative. This is mostly attributed to lower oil price which affects revenue from energy export. Although, many analyst were expecting a rate cut so as to boost export from Canada in other to protect her international trade.
Technically, USDCAD is more likely to get stronger and hit 1.35 levels because CAD will get weaker as a result of the current state of their economy. NZDUSD might see a rally from the support level of 0.6250 which was also the support level during the last NFP. This makes the support level a valid and reliable level. A rally from this level might take prices to 0.6326 and a final sell off from this level will take out the previous support to become resistance.