NZD/USD attempts to retrace the decline from the previous week as New Zealand Finance Minister Grant Robertson announces that the government will consider a national unemployment insurance program, but fresh remarks coming out of the Reserve Bank of New Zealand (RBNZ) may drag on the exchange rate as the central bank retains dovish forward guidance for monetary policy.
NZD/USD RATE VULNERABLE TO DOVISH RBNZ FINANCIAL STABILITY REVIEW
NZD/USD appears to have marked another failed attempt to test the April high (0.6176) as it pulls back from a fresh monthly high (0.6158), and the exchange rate may continue to carve a series of lower highs and lows even though Mr. Robertson looks to “cushion the blow of job loss through both income protection and retraining.”
Nevertheless, the response by fiscal authorities may push the RBNZ to the sidelines as the central bank expands its Large Scale Asset Purchase (LSAP) program in May to NZ$60 billion from NZ$33 billion, and Governor Adrian Orr and Co. may carry out a wait-and-see approach over the coming months as “the Committee agreed that it will stand ready to deploy further tools as needed, should the need for stimulus continue to increase.”
NZD/USD LONG (Buy)
ENTER AT: 0.60900