NZD craters as RBNZ drops tightening bias – TradeTheNews

FXStreet Team FXStreet

FXStreet (Barcelona) - The TradeTheNews Team shares that RBNZ’s decision to drop its tightening bias and introduce the possibility of a rate cut sent NZD/USD plunge towards 0.7310, lowest since 2011.

Key Quotes

“As central banks in Asia-Pacific continue to err on the side of accommodation, Reserve Bank of New Zealand did not disappoint in taking a more cautious stance. Not only did RBNZ drop its tightening bias entirely in its 4th straight pause, it also introduced the possibility of a rate cut as its next policy move.”

“RBNZ explained that lower oil will have a significant impact on prices, traded goods inflation continues to be very weak, and headline CPI would be "below the target band through 2015, and could become negative for a period before moving back towards 2%”."

“NZD/USD cratered about 140pips toward 0.7310 - the lowest level since early 2011 - just as RBNZ added it expects to see further significant depreciation in the exchange rate.”

“Separately, New Zealand trade remained in deficit for the 6th month, as exports to China and overall shipments of dairy fell over 25% y/y”

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

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