The Reserve Bank of New Zealand is in a transitional period. The previous governor, Graeme Wheeler, is out. In his place, Grant Spencer is only in an interim role. The new government led by Jacinda Ardern is planning a change in the mandate of the central bank, perhaps giving it an employment mandate.
So in the interim period, the decision to hold rates is not that important and not surprising either. The statements are not that important. However, the forecasts are made by the staff and they carry more weight, as the staff is probably here to stay.
The forecasts see rates rising in the second quarter of 2019 rather than the third quarter. This may not be a big change, but it is more upbeat than beforehand.
They do state that the political landscape is very uncertain, which is no surprise with a new government in Wellington.
NZD/USD is moving up, trading now at 0.6945 after hitting a high of 0.6963 just under the resistance level of 0.6970. Support is at 0.6880. Further resistance is at 0.7050.
The kiwi continues its recovery from the post-government forming lows of 0.6815. The recent political worries in the US regarding the tax plan hurt the US dollar.
More: Elliott Wave Analysis: AUDUSD and NZDUSD
