New Zealand Official Cash Rate November 24 2021

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    What does the data mean to the market?

    The Reserve Bank of New Zealand (RBNZ) governor decides to set the rate after consulting senior bank staff and external advisers. Traders watch interest rate changes closely as short term interest rates are the primary factor in currency valuation.

    A higher than expected rate is positive/bullish for the NZD, while a lower than expected rate is negative/bearish for the NZD.

    Historic deviations and their outcome

    August 18 2021 Today was unanimously forecast that they would like the rate to 0.50% however they didn't do so and kept rates at 0.25% This was classed as a deviation to the downside of 0.25% and we saw some 50 pips move in the first minute with some 25 pips of continuation.

    Check out the price action here:

    https://calendarapi.galaxysoftwareinc.com/l/61643/aHR0cHM6Ly9jYWxlbmRhci5nYWxheHlzb2Z0d2FyZWluYy5jb20vIy9jaGFydDtpPTYxNjQzO3Q9MjAyMS0wOC0xOCUyMDI6MDowMC4wO3M9TlpEVVNEO3I9UzE

    November 13 2019 A shock +0.25 deviation created a fantastic move over 85 pips in the first minute, with price pushing higher for some time after the news release, a great move to bank a healthy amount of pips.

    Check out the price action here:

    https://calendarapi.galaxysoftwareinc.com/l/12303/aHR0cHM6Ly9jYWxlbmRhci5nYWxheHlzb2Z0d2FyZWluYy5jb20vIy9jaGFydDtpPTEyMzAzO3Q9MjAxOS0xMS0xMyUyMDE6MDowMC4wO3M9TlpEVVNEO3I9UzEw

    August 7 2019 RBNZ was highly expected to cut the rates on this occasion; however they held the rates, therefore a no change here I classed it as a 0.25 deviation which saw a healthy 90 pip move, another great opportunity to bank those pips.

    Check out the price action here:

    https://calendarapi.galaxysoftwareinc.com/l/9174/aHR0cHM6Ly9jYWxlbmRhci5nYWxheHlzb2Z0d2FyZWluYy5jb20vIy9jaGFydDtpPTkxNzQ7dD0yMDE5LTA4LTA3JTIwMjowOjAwLjA7cz1OWkRVU0Q7cj1TMTA

    I will use forecasts of:

    Interest Rate 0.75

    Today's trade plan

    Today the forecast is for a hike to the interest rate to 0.75%. There are varying predictions; however, the average is 0.77%.

    No economist predict no change; therefore, I will take a buy on an actual outcome of 1.00% or a sell on an actual outcome of 0.50 %

    If we see no change in interest rates, they are kept at 0.50%. We can expect a solid move to the downside that I would expect to continue for some time.

    If we see a change to the interest rates to 1.00% (Effectively +0.25% deviation), I would expect to see an unprecedented move to the upside on all NZD pairs, which should last some considerable time.

    If we see no change in interest rates, they are kept at 0.50% We can expect a solid move to the downside that I would expect to continue for some time.

    If we see a change to the interest rates to 1.00% (Effectively +0.25% deviation), I would expect to see an unprecedented move to the upside on all NZD pairs, which should last some considerable time.

    Tradable pairs

    AUDNZD

    EURNZD

    GBPNZD

    NZDCHF

    NZDJPY

    NZDUSD

    Hope this helps but please do your own analysis!!

    Good luck!!

    James Thatcher

    Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

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