The Reserve Bank of New Zealand will be holding policy meeting and conference later today. I am not expecting the RBNZ to cut or hike rates at this month’s meeting. However these events are important at this time and could cause high volatility in NZD pairs providing us profitable trading opportunities because there was a little bit of speculation last week that the RBNZ might cut rates to cater for their housing market – personally I don’t think that they will I think it’s too premature at this point.
However because of the speculation we could see a little bit of weakness on the NZD leading into the event.
More importantly we will want to look at what the RBNZ say in their rate statement – are they becoming more dovish, if they are we could look to trade out of the event looking at shorts on NZD/USD since USD is the strongest currency for now. If however they are more hawkish than expected we could look at buying the NZD against the JPY or the EUR as they are both weak currencies.