NZD/USD: under pressure in Chinese crisis

By FXStreet FXStreet (Guatemala) – NZD/USD is scraping the barrel in respect of a recovery attempt with strong risk aversion still at play in the second week of the New Year. China continues to weigh on the global recovery and the antipodeans are getting the brunt of that.

The issue for the bird is one of interest rates. The RBNZ’s inflation target of 2% will likely remain under pressure and force the hand of the Central Bank to act and cut interest rates. Last year there were eight reviews and four rate cuts of 25bps to 2.50%. Some observers do not feel the RBNZ will act until later in the year in June and again in September to net 2.0% OCR.

When will the RBNZ cut again?

This year there are seven meetings scheduled between January and November. March 10th and April 28th could also be in the firing line for a possible rate cut given the pace of the global downturn and it has not been unknown for a Central Bank to cut without warning, as we got with the BoC last year. Inflation data and economic data will be telling in the next coming weeks. A …read more

Source:: FX Street