All throughout the week, the New Zealand dollar showed positive momentum, rising to new heights in the market. Experts believe that this upward trend will continue for quite a long time in the currency.
Technical analysis shows that the kiwi rose by 0.67% on Wednesday, reaching a price level of 0.6900. This is the highest value the currency reached since March last year, according to many analysts.
Then, the following day, the rapid rise continued amid the decision of the RBNZ on key rates, so the NZD/USD pair traded at a range of 0.6868-0.6869, not stopping at what has been achieved.
The main reasons were the two important decisions of the Reserve Bank of New Zealand: to provide banks with affordable loans and to keep the interest rate at a record low level of 0.25%. The RBNZ said the new lending program will start this December, and it will finance banks for about three years.
After the regulator left the current interest rates unchanged, the kiwi broke through the range of two-day consolidation, strengthening its positions. As for the previously planned introduction of negative rates, the RBNZ determined that the current circumstances does not need such an action yet.
Because of this, analysts predict the NZD / USD pair to reach a price level of 0.7000 in the future. To add to that, a long-term weakening of the US dollar will provide the kiwi a chance to continue an upward trend.
The RBNZ also deem that it would be more effective to use the NZD 28-billion financing program, than to cut the key rate by 0.1%. Most economists are skeptical about negative rates, as they believe the disadvantages outweigh the advantages. Such an action is also expected to negatively affect the behavior of citizens, forcing them to accumulate savings rather than spend.
Moreover, at the moment, the state of the New Zealand economy is much better than expected. The economic situation is much more stable compared to August, and the RBNZ even lowered its unemployment forecast amid the overall positive state of the national economy. In this case, the kiwi climbing up in the market is just natural. However, a consolidation in the pair remains questionable.
The material has been provided by InstaForex Company – www.instaforex.com
🚀If you want to get a Forex Robot Coded as per your trading strategy but are unable to do so because of the high price for the Robot then you can take advantage of the CROWD FUNDING campaigns feature. ✔ These are some crowd funding campaigns for Forex Robots, which when completed can provide the very same Forex Robot to the participants at an average price of $5-$10 per participant. ✔ You either participate in one of the already listed campaigns or send us your Forex strategy : Submit Crowd Funding Campaign , for which you would like the Forex Robot to be coded. A Crowd Funding Campaign would then be started for the same . ✔ All you have to do later on is to share the campaign online with your friends to encourage more people to participate in the campaign.
As a result, each participant can get that Forex robot for just a campaign contribution of $5 (which is the minimum). Participants can back the campaign by anything above or equal to $5 to reach the funding goal to close the campaign.