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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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AUDNZD Could Head Lower After RBNZ Interest Rate Decision

AUDNZD is trading near support with the latest Reserve Bank of New Zealand press conference ahead.

AUDNZD – Weekly Chart

AUDNZD – Weekly Chart

The price of AUDNZD is testing an uptrend support line from early 2020 ahead of the RBNZ. 

New Zealand’s central bank is set to raise interest rates for a 12th straight time as higher immigration and loose fiscal policy pressure inflation. 

The Reserve Bank is expected to increase its benchmark rate by 25 basis points to 5.5%, according to 18 of 21 economists surveyed by Bloomberg. The remaining three expected a 50bps increase, but the bank could signal further hikes later. That could be the fuel for an increase in the price of the NZD dollar. 

“Fiscal spending and a surge in migration suggest a higher peak in interest rates than signalled in February,” said Kelly Eckhold, chief economist at Westpac. “The RBNZ may not move immediately to Westpac’s 6% OCR peak but will signal an openness to get there.” 

New Zealand may not see the 2023 recession the RBNZ has been expecting, as record inflows of migrants are adding to growth and inflation. Migration is expected to ease shortages in the labour market and add to the demand for goods, services, and property. Westpac has estimated a net inflow of 100,000 people in 2023, adding around 2% to the population. 

RBNZ Expected To Raise Interest Rates

The RBNZ added a larger-than-expected 50-point rate increase at its previous meeting in April, which may mean a minor increase this week. 

“There are some who believe the main reason the RBNZ went 50 at its last meeting when most thought 25 was the most likely outcome, was because it had decided to minimise the chance that it would have to be aggressive post Budget so as not to become embroiled in the political process,” Bank of New Zealand said. 

With a general election set for October, opposition parties already say the budget will add to inflation and cause more mortgage pain for households.

Last Updated: 23/05/2023

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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