Antipodean currencies are the best performing majors this year. AUD is trading almost 3.7% year-to-date higher against USD while NZD gained over 3.4%. NZD may be set to gain further as market odds for a rate hike jumped following the latest move from the New Zealand government.
The New Zealand government ordered the Reserve Bank of New Zealand to take the housing market into consideration while making monetary policy decisions. Housing prices in New Zealand are running rampant after RBNZ slashed interest rates to record low levels. In turn, market participants viewed the requirement to take the housing market into consideration as a potential signal that rate hike may be coming. However, RBNZ Governor Orr claims that such expansion to the Bank's mandate will make it harder to deliver on other two targets - inflation and employment.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appHousing prices are rising quickly in many developed economies so the question is whether other governments and central banks will mimic the decision from New Zealand. A point to note is that RBNZ was the first G10 central bank to adopt inflation-targeting in 1990 and most of the world adopted this approach later on.
NZDUSD broke above the resistance at 0.7350 this week and trades 35% above low from March 2020. The next resistance zone to watch ranges above 0.7500 mark and is strengthened by the 61.8% retracement of the downward move started in mid-2014. Weekly chart. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
