NZD/USD jumps over 50 pips to print 29-month high on hints of RBNZ's remit change

NZD/USD bulls cheer the signals to alter the Reserve Bank of New Zealand’s (RBNZ) monetary policy by surging to the fresh multi-month high of 0.6984,  |  24/11/2020 01:26
  • NZD/USD rises to fresh highs since June 2018.
  • New Zealand Finance Minister Grant Robertson hints at adding house prices to the mandate.
  • Risk-on mood also favors the kiwi bulls amid a light calendar.

NZD/USD bulls cheer the signals to alter the Reserve Bank of New Zealand’s (RBNZ) monetary policy by surging to the fresh multi-month high of 0.6984, currently around 0.6966, during early Tuesday. In addition to the anticipated brakes on negative rates, upbeat trading sentiment also favor the pair’s upside moves.

News suggesting New Zealand (NZ) Finance Minister Grant Robertson’s search for advice on whether to include stability in house prices as a factor in the RBNZ remit while formulating the monetary policy recently pleased NZD/USD buyers. With the recovery in the NZ housing market considered as a strong fundamental support for the RBNZ, the odds of the negative rates get an additional hurdle, which in turn backs the north-run.

Read: Breaking: NZ Government mulls adding house prices as a factor in RBNZ's remit, NZD/USD nears 0.70

Also on the positive side are the latest comments from US President Donald Trump, laying the ground for the formal transition of powers to President-elect Joe Biden. Further, chatters that ex-Fed Chair Janet Yellen will be the next Treasury Secretary and the coronavirus (COVID-19) vaccine hopes are extra back-ups for the risk-on mood.

That said, stocks in Asia-Pacific cheer the market optimism while S&P 500 Futures and the US 10-year Treasury yields portray upbeat performance by press time.

Given the lack of major data/events, risk headlines will have to direct the near-term NZD/USD moves ahead of Thursday’s speech from RBNZ Governor Adrian Orr.

Technical analysis

Only if the pair drops back below the late-2018 top surrounding 0.6975, the countertrend trades can look towards 10-day SMA near 0.6900, else the 0.7000 and the June 2018 peak near 0.7045 may lure the NZD/USD buyers.

 

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