NZ Dollar Falls After RBNZ Keeps Rate Steady
April 30 2015 - 12:23AM
RTTF2
The New Zealand dollar weakened against the other major
currencies in the Asian session on Thursday after the Reserve Bank
of New Zealand's Monetary Policy Board decided to hold its Official
Cash Rate steady.
The board elected to hold its Official Cash Rate steady at 3.50
percent - in line with expectations.
It was the sixth straight month with no change for the RBNZ,
which had hiked the OCR by 25 basis points in each of previous four
meetings prior to September.
The board also pointed to the easing NZ dollar, adding that
further depreciation is to be expected.
The bank also cited several factors for taking its time in
taking any further actions, including weak global inflation,
declines in international oil prices and the high exchange
rate.
"The timing of future adjustments in the OCR will depend on how
inflationary pressures evolve in both the non-traded and traded
sectors. It would be appropriate to lower the OCR if demand
weakens, and wage and price-setting outcomes settle at levels lower
than is consistent with the inflation target," the bank said.
Meanwhile, data from the Statistics New Zealand showed that the
total number of building permits issued in New Zealand advanced a
seasonally adjusted 11.0 percent on month in March, standing at
2,271, a nine-year high. That topped forecasts for an increase of
2.0 percent following the 6.3 percent contraction in February.
Wednesday, the NZ dollar showed mixed trading against its majors
rivals. While the NZ dollar rose against the U.S. dollar and the
Yen, it fell against the U.S. dollar and the yen. In the Asian
trading today, the NZ dollar fell to 3-day lows of 0.7592 against
the U.S. dollar and 90.40 against the yen, from yesterday's closing
quotes of 0.7677 and 91.36, respectively. If the kiwi extends its
downtrend, it is likely to find support around 0.72 against the
greenback and 83.50 against the yen.
Against the euro and the Australian dollar , the kiwi dropped to
more than 1-1/2-month lows of 1.4639 and 1.0518 from yesterday's
closing quotes of 1.4471 and 1.0408, respectively. The kiwi may
test support near 1.59 against the euro and 1.07 against the
aussie.
Looking ahead, Japan construction orders and housing starts for
March is due to be released at 1:00 am ET. In the European session,
German retail sales for March and unemployment rate for April,
Swiss KOF leading indicator for April and Eurozone CPI for April
and unemployment rate for March are slated for release.
In the New York session, Canada GDP for February, U.S. weekly
jobless claims for the week ended April 25, U.S. personal income
and spending data for March are set to be published.
At 8:30 am ET, Federal Reserve Governor Daniel Tarullo will
deliver a speech titled "Tailoring Community Bank Regulation and
Supervision" at the Independent Community Bankers of America Policy
Summit, in Washington DC.
At 10:30 am ET, BOC Governor Stephen Poloz will testify, along
with Senior Deputy Governor Carolyn Wilkins, before the Senate
Finance Committee, in Ottawa.
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