Home Forex Kiwi Tumbles on RBNZ, ECB watched

Kiwi Tumbles on RBNZ, ECB watched

by Paul

New Zealand dollar tumbles broadly today as RBNZ indicated that further policy will be needed, paving the way for another rate cut in August. Swaps data is pricing in 90% of a cut in OCR at the meeting on August 11, from current 2.25% to 2.00%.

The central bank noted that long term inflation expectations are “well-anchored” at 2% but short term inflation expectations remain low. And, the “stronger exchange rate implies that outlook for inflation has weakened since the June Statement”. And, “a decline in the exchange rate is needed”.

NZD/USD drops to as low as 0.6950 so far today and the breach of 0.6970 near term support is taken as a sign of near term reversal.

Risk Warning:

This article is for information purposes only.

Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Related News