NZ Dollar Weakens After RBNZ Expands QE
May 12 2020 - 11:02PM
RTTF2
The NZ dollar lost ground against its major rivals in the Asian
session on Wednesday, after the Reserve Bank of New Zealand
expanded its bond-buying programme to help combat the economic
disruption caused by the COVID-19 pandemic and suggested that
negative rates could be "an option in future."
The Monetary Policy Committee of the Reserve Bank of New Zealand
raised the large scale asset purchase programme potential to NZ$60
billion from NZ$33 billion.
Policymakers maintained the Official Cash Rate, or OCR, at 0.25
percent, as widely expected.
The monetary policy will continue to provide significant support
through keeping interest rates low for the foreseeable future, the
bank said.
The committee observed that a negative interest rate will become
an option in future, but currently, expansion to asset purchase
programme is the most effective way to deliver further
stimulus.
The bank said it is prepared to use additional monetary policy
tools if and when needed, including reducing the OCR further,
adding other types of assets to the LSAP programme, and providing
fixed term loans to banks.
The NZD/USD pair recorded a 6-day low of 0.6000, compared to
Tuesday's closing quote of 0.6076. The kiwi is seen finding support
around the 0.57 mark.
The kiwi depreciated to a 6-day low of 64.32 against the yen,
after having strengthened to 65.37 at 10:00 pm ET. The pair had
closed Tuesday's deals at 65.09. Next key support for the kiwi is
likely seen around the 60.00 level.
Data from the Bank of Japan showed that Japan overall bank
lending rose 3.0 percent on year in April, coming in at 553.486
trillion yen.
That's up sharply from the 2.0 percent annual increase in
March.
After rising to a weekly high of 1.0616 at 10:00 pm ET, the kiwi
declined to a 6-month low of 1.0776 against the aussie. At
yesterday's trading close, the pair was quoted at 1.0647. The kiwi
is likely to face support around the 1.09 region, if it falls
again.
Survey data from Westpac showed that Australia's consumer
confidence recovered in May from a very low level.
The Westpac-Melbourne Institute Index of Consumer Sentiment rose
to 88.1 in May from 75.6 in April.
The kiwi slipped to a 9-day low of 1.8072 against the euro,
pulling away from a high of 1.7801 seen at 10:00 pm ET. The
euro-kiwi pair was worth 1.7846 at Tuesday's close. Should the kiwi
falls further, it is likely to test support around the 1.86
region.
Looking ahead, Eurozone industrial production for March is due
in the European session.
In the New York session, U.S. PPI for April is scheduled for
release.
Federal Reserve Chair Jerome Powell will deliver a speech about
current economic issues at a webinar organized by the Peterson
Institute for International Economics at 8:00 am ET.
AUD vs NZD (FX:AUDNZD)
Forex Chart
From Mar 2024 to Apr 2024
AUD vs NZD (FX:AUDNZD)
Forex Chart
From Apr 2023 to Apr 2024