RBNZ survey for the first quarter of 2019 showed that 1-year expectations declined below 2%. Last week’s labor market report was extremely , with unemployment spiked sharply, rising to 4.3% against 4.1% expected. Employment rose by just 0.1% in Q4, while the labor cost index in-creased by only 0.5%, also short of expectations.
Considering the slowing growth and at home, as well as external risks, including US-China trade tensions and worrying signals from the global economy, the monetary authorities will likely take a more downbeat rhetoric during the first meeting in 2019 and will keep rates on hold at record low.
For NZDUSD , such a scenario implies further downside pressure. However, a dovish tone won’t be a surprise for traders as it is likely prices in already. So the risks for the kiwi are limited from this event. In the short term, the pair could manage to hold above the 0.67 support as dollar demand seems to be easing after a spectacular rally since early February, though downside risks persist.