The price of the New Zealand dollar rose sharply after the decision of the Reserve Bank of New Zealand to raise interest rates once again by 0.25% to 3.25%. According to the head of the Bank, in the next 12 months the interest rate will be increased by 1% in order to reduce inflationary pressures. According to the RBNZ, the exchange rate remains quite high, which is caused by the increasing demand for agricultural products, and especially for the dairy products, which became possible due to the increased wealth of the middle class in Asia.
Another factor that has a positive impact on the economic development of the country is the construction boom that occurred after the devastating earthquake and inflow of immigrants.
We positively view the growth prospects of the New Zealand dollar, but expect that the price will not rise significantly and then will begin to decline because of the willingness of the RBNZ to fight high exchange rate.
Wish you the profits!
FXFINPRO Capital Analytical department.