GBP/NZD – Awaiting Further Clues On Tapering From BoE

#OPINIONLEADER# #Signal#

 SEP 23, 2021

• Chance of a 0.5% rate hike from the RBNZ getting slimmer
• Upcoming BoE meeting may determine trading direction of GBP/NZD

Chart 1: GBP/NZD H4 chart

On Tuesday, the Reserve Bank of New Zealand (RBNZ) Assistant Governor Christian Hawkesby said in a speech that “central banks globally tend to follow a smoothed path and keep their policy rate unchanged or move in 25 basis point increments”, indicating that the chance of a 0.50% hike in interest rate during the October’s meeting may have become slimmer. This led to the weakening of the New Zealand dollar across the board.

The Bank of England (BoE) is scheduled to meet later today. With last month’s meeting seeing half of the committee members feeling that the minimum criteria for considering a tighter monetary policy have been met, we may actually be hearing from the central bank on the subject of quantitative easing tapering.

GBP/NZD has been ranging across within 185pips for the past two weeks. Depending on how the BoE monetary policy meeting goes down today, GBP/NZD may break out of this range, presenting trading opportunities on either direction.

Trade Setup for GBP/NZD (H4)

Buy Stop at 1.9610

Sell Stop at 1.9350

Upcoming major news that may impact price movement of GBP/NZD

23 September – UK Flash PMI data release at 1630 (GMT+8)

23 September – Bank of England monetary policy meeting at 1900 (GMT+8)

24 September – Bank of England MPC member Tenreyro speaking at 2100 (GMT+8)