When is the RBNZ and how could it affect NZD/USD?

RBNZ overview

The RBNZ is expected to leave the Official Cash Rate (OCR) at 1.75% at its policy meeting while markets look for potential changes in language from the new governor of the Central Bank, Adrian Orr.

This will be his first MPS as the RBNZ Governor, so while traders do not expect any material shift in policy, there is a special interest today, if only for the novelty factor that will likely wear off by the next meeting around - (Orr has been acting Governor since 27th March).

"It’s an not an either 'Orr' decision on rates this month, as no change is obviously going to be the outcome, but we will get a chance to see if his presentation style is different or not. I’d strongly suspect that it will be given his penchant for the media so far," analysts at Rabobank explained.

How could the RBNZ affect NZD/USD? 

Interest rate markets are unlikely to be perturbed by a steady–as–she–goes outcome while, at the same time, the Kiwi has fallen against the dollar since the Feb meeting, from the lofty heights of 0.7436 down to 0.6948, (today's new trend low). So jawboning is certainly out of the question this meeting around as the dollar takes on fresh highs at 93.41 in the DXY.  Meanwhile, the NZD/USD has dropped below the key 200-month moving average support at 0.6980 and technicals stay bearish with RSIs biased to the downside longer term, although stabilising out of oversold territory - pointing to a period of consolidation. However, something hawkish from the new Governor would likely give the bird some much-needed wind in its tail with focus on 0.7020 through the 50-4hr SMA. To the downside, 0.6950 guards 0.6880. 

Key notes:

• RBNZ Preview: Policy statement hints on inflation are seen boosting NZD exchange rate
• RBNZ: Format of monetary policy statement has been updated
• RBNZ to keep rates unchanged this week: Reuters Poll
• RBNZ: No change expected in the OCR outlook - Westpac

About the RBNZ interest decision and statement

The RBNZ interest rate decision is announced by the Reserve Bank of New Zealand. If the RBNZ is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, or bullish, for the NZD. The RBNZ rate statement contains the explanations of their decision on interest rates and commentary about the economic conditions that influenced their decision.