The Kiwi weakened against the greenback in today’s trading session after the Reserve Bank of New Zealand signaled the possibility of upcoming rate cuts, while sentiment on the greenback remained vulnerable after the Federal Reserve’s latest policy statement.
In a widely expected move, the RBNZ held its benchmark interest rate at 3.50% but said it could lower borrowing costs in the future.
“The bank expects to keep monetary policy stimulatory and is not currently considering any increase in interest rates,” RBNZ Governor Graeme Wheeler said.
He added that “it would be appropriate to lower the official cash rate if demand weakens and wage and price-setting outcomes settle at levels lower than is consistent with the inflation target.”
Intra-day bias remains bearish with 21 crossing 55 EMA downward. Stochastic oscillator also shows that the markets has retraced enough providing a fresh sell signal. Am expecting further decline to 0.7500 psychological zone.
Tomorrow investors would be taking a close look at USD ISM Manufacturing PMI.