A basic approach of foreign exchangeNew Zealand dollar trading, with the decision of the RBNZ factor
RBNZ Reserve Bank of New Zealand is the Central Bank of New Zealand. Unlike other central banks Western type RBNZ, is not completely independent. In other words, you can only customize the RBNZ monetary policy according to the agreed destination (PTA). In accordance with this agreement, the objective of inflation and price stability must be negotiated between the Government and the Reserve Bank. The second target inflation as PTA says "1-3% on average" is defined in the medium term, with regard to all groups of IPC. To accomplish this, senior RBNZ meet eight times a year to determine the future course of interest rates during the night.
RBNZ's executive structure
Governor
Governor
Operating head
Heads of departments of banks
Governing Council (7 members)
If the RBNZ tends to increase, to reduce or maintain the interest rate, the decision has immediate effect with the New Zealand dollar, and for this reason ...
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To increase the interest rate, the RBNZ is literally the sale of securities of the Government of New Zealand's important financial traders, which in turn would have to pay for the transfer of money to the RBNZ. This would reduce the provision of $ New Zealand of the banking system and, therefore, to assess its value.
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From interest rates, the RBNZ is literally buy securities of the Government of New Zealand's important financial traders, who in turn would be paid by transfer money to the accounts of the RBNZ. Increasing the supply of dollars in New Zealand of the banking system and, therefore, to depreciate their value.
They propose strategies for trading the dollar New Zealand with this cost-effective version:
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Previous decision: buy sale rumours the new strategy:
* If the market expects the feet of the RBNZ, traders may buy the New Zealand dollar for some time prior to the announcement and squares its position after the decision.
* If the market expects the RBNZ for the reduction of interest rates, traders to sell dollars in New Zealand for some time before the announcement and squares its position after the decision. /H2 >
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After the surprise decision: strategy
* If this is the decision of the RBNZ expectations, sellers prefer staying on the sidelines.
* If the RBNZ reduces interest rate, while the market is expected to walk or be pending, merchants can sell New Zealand dollars, at a very fast trade (1-2 hours).
* If the RBNZ rate increases when the market is expected to cut or remain pending, merchants can buy the New Zealand dollars, at a very fast trade (1-2 hours).