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Forex - NZD/USD erases modest gains as RBNZ rate decision awaited

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Forex Pros - The New Zealand dollar erased modest gains against its U.S. counterpart on Wednesday, easing off the daily high ahead of the Reserve Bank of New Zealand's official cash rate decision due Thursday.

NZD/USD retreated from 0.7416, the daily high, to hit 0.7390 during late Asian trade, dipping 0.03%.

The pair was likely to find support at 0.7349, Monday's low and resistance at 0.7472, the high of March 3.

New Zealand's Prime Minister John Key said last week that he expects the central bank to reduce rates to help the economy recover in the aftermath of the deadliest earthquake in 80 years.

The prime minister also said a recession in the first half of 2011 could not be ruled out and there's likely to be "virtually no growth" recorded for the financial year through June.

Over the weekend, the country's Treasury said it may need to borrow more money and reconsider spending plans after the February 22 earthquake, which caused as much as NZD15 billion in damage.

Meanwhile, the kiwi edged higher against the euro, with EUR/NZD slipping 0.06% to hit 1.8782.

On Thursday, the RBNZ was to announce its official cash rate. The decision was to be followed by a closely watched press conference.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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