The New Zealand dollar rose sharply against the US dollar after the Reserve Bank of New Zealand left the official interest rates unchanged.
Many experts expected more moderate statements from the regulator regarding the further possibility of lowering interest rates, but they this did not happen.
Thus, the official interest rate in New Zealand remained unchanged at 1.75%. The RBNZ stated that interest rates will remain low for a long time as the outlook for monetary policy is still surrounded by uncertainty.
Despite this, the market was optimistic about this statement, as many participants feared further pressure on rates.
The Reserve Bank of New Zealand predicts that the official interest rate will be about 1.9% by the second quarter of 2019. As for the New Zealand dollar, its further weakening will lead to an acceleration of inflation according to the bank. In the meantime, consumer price inflation remains near the middle of the target range and long-term inflation expectations were fixed at around 2%.
Economic growth in the second quarter as a whole was in line with expectations according to banking experts.
As for the technical picture of the NZDUSD pair, the bulls managed to keep the lower bounds at 0.6840 judging by the schedule. The rebound from it will lead to the first important resistance level of 0.7000. The breakthrough of this level will serve as a good impulse to continue the upward trend with an exit at 0.7965 and 0.7200.
Commodity currencies ignored the news on consumer price inflation in China, which accelerated in October this year. This happened against the backdrop of a slowdown in the decline of food prices.
According to a report by the National Bureau of Statistics, China's consumer price index rose 1.9% in October 2017 compared with the same period last year after rising 1.6% in September. Economists had expected inflation to grow by only 1.8%.
Prices for food products decreased by 0.4% compared to the same period of the previous year after a decline of 1.4% in September.
The main task of the Chinese authorities is to keep the annual rate of inflation in the current year below 3%.
