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NZD/USD Rebounds to 0.7390 from 0.7323 in Europe

Posted by Chris Advincula on Mar 9, 2015 5:37:00 AM

NZD.3.9 resized 600Chart: WorldWideMarkets Alpha Trader

The New Zealand Dollar showed a shortcovering rebound to 0.7390 in Europe from the intraday low of 0.7323 (+67 pips) after having fallen sharply by 187 pips from Friday's high of 0.7510 following the stronger-than-expected U.S. Employment Data.

The Reserve Bank of New Zealand mentioned last week that it was seeking ways on how to redefine the rules on property investment loans in an attempt to cool surging house prices and to prevent a housing bubble situation in the future.

The RBNZ had mentioned their concern about Auckland's shortage of properties while demand and prices soared 13 percent in a year ending February while inflation is below their inflation target band of 1-3 percent. 

The RBNZ had a pending plan 17 months ago to place limits on low down payment mortgage loans and may soon impose this new banking rule. In doing so, the central bank will avoid having to raise their interest rates in a time where oil prices have fallen significantly while the New Zealand Dollar gained 2.2 percent last year on a trade weighted basis.

The current RBNZ official cash rate currently stands at 3.50% since July 23, 2014. The next RBNZ meeting is scheduled for March 12. Analysts predict the rates will remain at 3.50%.

Topics: forex trading, European Session, New Zealand, Fundamental Analysis, RBNZ, NZDUSD

 

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