Open trading account 
The most important event risk on the calendar this week is the Reserve Bank of New Zealand’s monetary policy announcement. Having raised interest rates at the last 2 meetings, the RBNZ is the world’s most hawkish central bank and 85% of the economists surveyed by Bloomberg expect the central bank to raise rates for the third time in a row. However I believe rates will remain unchanged and this discrepancy is where I see the opportunity to sell the NZD/USD.
Since the last monetary policy meeting on April 24th, New Zealand economic data has taken a turn for the worse. Commodity prices have fallen significantly, consumer confidence declined, spending fell, manufacturing activity slowed, the trade surplus narrowed and house price growth slowed. The only area of strength is the service sector and the labor market but unfortunately labor data is for the first quarter and chances are hiring slowed in Q2. The biggest problem for New Zealand is the collapse in dairy prices. Dairy accounts for approximately a third of New Zealand’s exports by value and since February, prices have fallen more than 23%. All these factors could contribute to sell off on NZDUSD should the rates remain unchanged.
Since the last monetary policy meeting on April 24th, New Zealand economic data has taken a turn for the worse. Commodity prices have fallen significantly, consumer confidence declined, spending fell, manufacturing activity slowed, the trade surplus narrowed and house price growth slowed. The only area of strength is the service sector and the labor market but unfortunately labor data is for the first quarter and chances are hiring slowed in Q2. The biggest problem for New Zealand is the collapse in dairy prices. Dairy accounts for approximately a third of New Zealand’s exports by value and since February, prices have fallen more than 23%. All these factors could contribute to sell off on NZDUSD should the rates remain unchanged.
