NZ Dollar Retreats As RBNZ Signals Rate Cut
22 September 2016 - 11:12AM
RTTF2
The New Zealand Dollar weakened against the other major
currencies in the Asian session on Thursday, as the Reserve Bank of
New Zealand's statement hinted that further easing is closer on the
horizon than previously expected, after maintaining its Official
Cash Rate at the record low.
The Reserve Bank of New Zealand kept its Official Cash Rate at
the record low of 2.00 percent. The decision was in line with
expectations after the central bank trimmed its benchmark by 25
basis points in August after holding fire for two straight
months.
The RBNZ added that further easing may be appropriate, depending
on the results of forthcoming economic data.
"Monetary policy will continue to be accommodative. Our current
projections and assumptions indicate that further policy easing
will be required to ensure that future inflation settles near the
middle of the target range. We will continue to watch closely the
emerging economic data," RBNZ Governor Graeme Wheeler said.
Meanwhile, the Asian stock markets traded higher after the
Federal Reserve kept interest rates unchanged and hinted at a rate
hike before the end of the year.
Wednesday, the NZ dollar showed mixed trading against its major
rivals. While the kiwi rose against the U.S. dollar and the euro,
it fell against the yen and the Australian dollar.
In the Asian trading, the NZ dollar fell to nearly a 4-week low
of 73.38 against the yen and more than a 2-week low of 1.0405
against the Australian dollar, from the recent lows of 73.87 and
1.0333, respectively. If the kiwi extends its downtrend, it is
likely to find support around 71.00 against the yen and 1.05
against the aussie.
Against the kiwi, the greenback dropped to 0.7316 from nearly a
2-week high of 0.7369. The kiwi may test support near the 0.70
region.
The kiwi edged down to 1.5285 against the euro, from a recent
high of 1.5187. On the downside, 1.55 is seen as the next support
level for the kiwi.
Looking ahead, European Central Bank releases its economic
bulletin in Frantfurt at 4:00 am ET. Bank of England Financial
Policy Committee statement is due to be published at 4:30 am
ET.
In the New York session, U.S. weekly jobless claims for the week
ended September 17, U.S. existing homes sales data for August, U.S.
FHFA house price index for July, U.S. leading indicators for August
as well as Eurozone consumer confidence index for September are
slated for release.
At 9:00 am ET, European Central Bank President Mario Draghi,
Vice Presidents Valdis Dombrovskis and Vitor Constancio are
expected to speak at the European Systemic Risk Board annual
conference in Frankfurt.
At 9:30 am ET, Bank of England Deputy Governor Jon Cunliffe is
expected to participate in a panel discussion at the European
Systemic Risk Board in Frankfurt.
At 1:00 pm ET, Bank of England Governor Mark Carney will deliver
a presentation titled "Arthur Burns memorial lecture," in Berlin.
At the same time, BOE MPC Member Kristin Forbes will deliver a
speech at Imperial College in London.
The Japanese market is closed in observance of Autumnal Equinox
day holiday.
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