Kiwi Dollar Flops on RNBZ Comments
After comments from an official of the New Zealand Reserve Bank which hinted at consideration for lower interest rates, the Kiwi Dollar skidded nearly 1.5% against its US rival during the Asian and European sessions. The RBNZ’s Assistant Governor warned investors that price risks and weakened demand, especially from their key trading partner China, could warrant a drop in interest rates; the RBNZ was among the first central banks to raise rates after the financial crash of 2008 and the Kiwi Dollar is often used by investors for carry trade.
As reported at 8:58 am (BDT) in London, the NZD/USD was trading at $0.7559, a 1.4% decline. Meanwhile, the AUD/NZD was trading at NZ$1.0224, down 1.2% after nearly hitting parity this week. Currency strategists say that the RBNZ commentary has effectively ensured that New Zealand is still able to compete with its neighbor, Australia, given that the RBA’s rates are already lower than the RBNZ’s.
Dollar Traders Await Data
In the Eurozone, preliminary PMI releases were disappointing and helped to push the Euro lower versus the greenback, with the EUR/USD pair trading at $1.0682, a loss of nearly 0.5%. Traders of the US Dollar are still waiting for economic data to point to a possible direction for interest rates. The US Dollar Index was trading earlier at 98.347 .DXY, a gain of 0.4%.