NZ Dollar Falls After RBNZ Rate Decision
January 29 2015 - 12:21AM
RTTF2
The New Zealand dollar fell against the other major currencies
in the early Asian session on Thursday, as the Reserve Bank of New
Zealand said it could cut the official interest rate this year
after keeping it unchanged today.
The Reserve Bank of New Zealand's monetary policy board elected
to hold its Official Cash Rate steady at 3.50 percent, in line with
expectations. It was the fourth 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.
In the statement, RBNZ Governor Graeme Wheeler said that the
apex bank expects to keep rates there "for some time" and the next
interest rate move could be either "up or down" depending on
emerging economic data. This was in contrast the central bank's
previous stance that the next move would probably to the
upside.
The New Zealand dollar was also impacted in early trading by the
U.S. Federal Reserve's decision to hold interest rate unchanged and
its commitment to remain patient in raising rates.
Meanwhile, data from the Statistics New Zealand showed that New
Zealand had a merchandise trade deficit of NZ$159 million in
December. That missed forecasts for a surplus of NZ$75 million
following the downwardly revised NZ$285 million shortfall in
November. Exports were down 6.9 percent on year to NZ$4.42 billion,
while imports climbed an annual 7.6 percent to NZ$4.58 billion.
Also, the Asian markets fell as oil prices dropped to their
lowest level in nearly six years after the weekly U.S. Petroleum
Status report showed a larger-than-expected increase in U.S. crude
supplies.
In the Asian trading today, the NZ dollar fell to near a 4-year
low of 0.7313 against the U.S. dollar around 4:45 pm ET. If the
kiwi extends its downtrend, it is likely to find support around the
0.72 area.
Around 4:45 pm ET, the kiwi dropped to a 6-day low of 1.5423
against the euro. On the downside, 1.57 is seen as the next support
level for the kiwi.
Against the yen and the Australian dollar, the kiwi slipped to a
3-month low of 85.89 and more than a 1-1/2-month low of 1.0794 from
yesterday's closing quotes of 85.99 and 1.0775, respectively. The
kiwi is likely to find support around 85.30 against the yen and
1.09 against the aussie.
Looking ahead, German unemployment rate for January and Eurozone
M3 money supply data for December and economic confidence for
January are due to be released in the European session.
In the New York session, preliminary German CPI for January,
U.S. pending home sales data for December and U.S. weekly jobless
claims for the week ended January 24 are scheduled for release. At
11:30 am ET, European Central Bank Executive Board member Benoit
Coeure will take part in a panel discussion on "The future of Euro"
organized by the Innocenzo Gasparini Institute for Economic
Research and Centre for Applied Research at Bocconi University in
Milan, Italy.
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