RBNZ intervention big market mover

The Reserve Bank of New Zealand intervened in the Forex Market last night to protect the NZD by major sell offs of its currency. This weakened the NZD across the board, dropping the USD/NZD a 100 pips from its all time high.

The reasoning behind RBNZ’s action was to test to see if its sudden increase in interest rates could be justified in the real market. The Australian market is closed due to the Queen’s Birthday; expect to see high market movement once the AUD market is open. The RBNZ also believe traders will try to beat the intervention and buy the NZD to drive the price higher.

By Sumant Yerramilly