The Reserve Bank of NZ interest rate decision is due at 3:00 PM

The Reserve Bank of New Zealand will announce their interest rate decision at 3:00 PM NY . The expectation is for no change. 

From a technical perspective, the price moved back above the 200 day MA at the 0.6963 level and this will be downside support longer term.  The 100 day MA and bottomside of trendline resistance comes in above at the 0.7155 and 0.7187 levels. 

 Looking at the shorter term chart, the 0.7044 level  is the 38.2% of the move up from Yesterdays low. A break below this level is likely to lead to further downside liquidation with the close from yesterday at  the 0.7027 being the next target. 

 Below is the comments released post the last interest rate decision on January 28th 2010.   Since that time, The Unemployment rate for the 4Q came in weaker than expectations at 7.3% (vs 6.8% expectations), Retail Sales were also weaker at -1.8% ex Auto, Credit Card Spending fell in February for the 1st time in 8 months.  The Trade Balance rose to a surplus from a deficit on the back of increased exports.  The data is consistent with standing firm and keeping a similar target. 

COMMENT FROM LAST MEETING AS RELEASED BY THE RESERVE BANK OF NEW ZEALAND

Reserve Bank Governor Alan Bollard said: “The outlook for the New Zealand economy remains consistent with the projections underlying the December Monetary Policy Statement.

“Global activity continues to recover, helping push New Zealand’s export commodity prices higher. Economic growth is most apparent in China, Australia, and emerging Asia. However, sustained growth throughout our trading partners is not assured, with many still facing impaired financial sectors and overall activity still reliant on policy support.

“Similarly, the New Zealand economy continues to recover. Policy stimulus and improving export earnings have seen a pickup in household spending. That said, households remain cautious, with credit growth subdued. Business spending remains weak.

“Annual CPI inflation is currently at the centre of the target band, and is expected to track comfortably within the band over the medium term.

“The economy is being assisted by both monetary and fiscal policy support. As growth becomes self sustaining, fiscal consolidation would help reduce the work that monetary policy might otherwise need to do.

“If the economy continues to recover in line with our December projections, we would expect to begin removing policy stimulus around the middle of 2010.”