The RBNZ left its interest rate unchanged in January. Investors expect that the New Zealand central bank will begin tightening monetary policy in March.
In general, the decision to leave monetary policy unchanged was anticipated by market participants. According to Donald W., currency strategist at Binary Options Broker Optionova, the possibility that the central bank will raise the rate in January was at the level of 30%. The bank expects that the RBNZ will start to raise rates in March and assessed the possibility of developing such a scenario at the level of 60%.
In Binary Options Broker Optionova they believe that March is the most suitable month, because by that time will be more informed statements on monetary policy, which will provide a platform for further action by the RBNZ. Based on this, the central bank will be able to explain their decisions using economic forecasts and "detailed narrative." In Binary Options Broker Optionova, they also believe that such prospects will support the New Zealand dollar. The bank also expects that the failure of the rate increase in March will cause confusion among the majority of investors, but this fact does not change their expectations of imminent tightening of monetary policy.
Meanwhile, the New Zealand economy is showing more signs of recovery. By the end of 2013 the number of permits for construction reached 21,300, showing an annual growth of 26%. Analysts say that the figure was the highest for the period since 2007. The main growth driver was the increase in the number of permits acted in Canterbury (annual growth of 43% or 5762) and Auckland (annual growth of 38%, or 6309).
The estimated cost for the construction of permitted also increased. In general, the figure was 12.1 billion dollars, which would exceed the previous year by 20%. The volume of construction of residential facilities totaled 7.9 billion dollars; an increase of 28%, while non-residential facilities planned cost was $4.2 billion, increasing by 6.9%.
Results of the January meeting of the RBNZ weakened the Kiwi. The Pair NZD/USD is decreasing in the bearish wave A/B level Daily. "Key supports are pivot MF 0.8116 and minimum 0.8083, a break of which will start a long-term downward trend," said the experts of the Binary Options Broker Optionova. Strengthening above maximum 0.8431 will show the start of rising wave A/B level, supposedly, Weekly2. Key resistances will be Fibonacci levels 0.8472/88 and 0.8542 maximum.
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