Tuesday, July 19, 2011

TD Securities: RBNZ is ready to lift up the interest rates

Analysts at TD Securities believe that the Reserve Bank of New Zealand may increase the interest rates from the record minimum of 2.5% at its next meeting that is taking place on Thursday, July 28.

In their view, it may happen as the inflation rate in the second quarter and the first quarter GDP turned out to be higher than expected.

New Zealand’s economy gained 0.8% in the first 3 months of the year while the central bank was projecting only 0.3% growth. The nation’s CPI added 1% in the second quarter versus 0.8% forecast.

According to TD Securities, RBNZ may increase the borrowing costs next week by 50 basis points compensation the cut made on March 10 or at least prepare the markets for such move on September 15.  

In the near term New Zealand’s dollar, however, will likely remain under pressure ahead of EU summit in Brussels scheduled on July 21, warns Ueda Harlow.     

h4 nzdusd 15-12

 
Chart. H4 NZD/USD


published by FBS Holdings © 2011