विदेशी मुद्रा विश्लेषण और समीक्षा: 27.03.2019

27.03.2019 11:56 AM

Central Bank waiting for the beginning of the crisis

The decision of the RBNZ was unexpected and logical. Earlier, the currencies of the Pacific region, particularly the Australian and New Zealand dollars received support in the wake of the steady growth of the Chinese economy and the world as a whole. Last year, their positions were somewhat shaken on the wave of the commencement of trade wars inspired by Washington around the world.

This was most clearly manifested in the conflict with China, the real and most powerful competitor of the United States. On this wave, he was the first to show signs of economic decline, which naturally hit exports to the PRC from Australia and New Zealand. The situation continued to remain generally positive for these countries but when it became clear that the process of slowing general global economic growth in particular Chinese, European and already American began to manifest itself with persistent consistency. First the Fed then the ECB signaled the problems and made it clear that one should not expect a tightening of monetary policies. Of course, the RBNZ could not fail to respond in this case, which was shown at the end of today's meeting by the decision not only to leave the key interest rate at the level of 1.75%.

In the wake of this message, the rate of the New Zealand currency went down sharply and falls exactly on one figure in tandem with the US dollar at the time of writing this article. The RBNZ decision also exerted widespread pressure on the Australian dollar, which fell by 40 points and the reaction of market players is understandable. They expect that the RBA will not stand aside and may come to the conclusion that it is necessary to lower rates in this situation.

Such a reaction of the Central Bank can be explained by the desire to get ahead of the possible process of starting to lower the Fed rates and a new round of ECB stimulus measures, which will make the New Zealand and Australian dollars attractive high and hit the export of these countries in the world market accordingly.

Evaluating the emerging picture, we note that the signal from the RBNZ is significant and indicates a change in sentiment in the Central Bank of economically developed countries. In turn, it demonstrates a rise in expectations among regulators, if not a new wave of crisis in the near future, then eventually transformed into a crisis.

Forecast of the day:

The EUR/USD pair is holding above 1.1250. We consider it possible to sell it with a target level of 1.1215 and then 1.1175 after a decline below this mark.

The AUD/USD pair remains in the short-term downtrend in the wake of fears of a continued decline in the growth of the global economy and as a result, there is a demand for commodity and commodity assets. We consider it possible to sell the pair with targets at 0.7065 and 0.7000 after its decline below the level of 0.7100.