Trading The New Zealand, RBNZ Interest Rate Decison, May 10, 2017

The RBNZ Interest Rate decision today is expected remain at the current level of 1.75% as there are practically no forecasts of a change. In the highly unlikely event of a surprise rate action, we should see plenty of market reaction and opportunity to take a trade…

5:00pm (NY Time) RBNZ Interest Rates Decision Forecast 1.75% Previous 1.75% DEVIATION: 0.25% (BUY NZD 2.00% / SELL NZD 1.50%)

The Trade Plan Current forecast from economists surveyed by Bloomberg agree that RBNZ is likely to keep the official rate by unchanged at this meeting; however, in the event that Governor Wheeler surprises the market either by cutting rates or hiking it by 0.25%, we should see an immediate strong volatility in the NZD which is a great opportunity to spike trade NZD.

I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: NZDUSD.

Outlook Score Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.

Definition: The OCR (Official Cash Rate or RBNZ Interest Rates) influences the price of borrowing money in New Zealand and provides the Reserve Bank with a means of influencing the level of economic activity and inflation. An OCR is a fairly conventional tool by international standards.

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