RBNZ’s Hawksby: Lower NZD is helping to insulate the New Zealand economy
|The Reserve Bank of New Zealand’s (RBNZ) Assistant Governor Christian Hawkesby set out the framework the Bank used to analyze the global economy and its influence on New Zealand in his latest speech.
Key quotes
The Reserve Bank lowered the Official Cash Rate by 75 basis points in 2019, due in part to the slowdown experienced by the country’s trading partners.
Lower NZD is helping to insulate the New Zealand economy
A number of short-to-medium-term risks to both the upside and downside.
Some upside risks to our terms of trade from limited dairy supplies.
How banks respond to final decisions of our capital review remains a key uncertainty.
A key uncertainty will be whether the NZD plays its role as a shock absorber.
Coronavirus is a human tragedy that has emerged that will need to monitor.
FX implications
With mostly mixed statements, without any clear direction of future RBNZ decision, the RBNZ policymaker failed to beat the market’s present risk-on sentiment that is currently helping the New Zealand dollar. The Kiwi pair initially surged to the intra-day high of 0.6548 after the release but is waiting for fresh clues around 0.6545 by the press time.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.