Kiwi Sinks after RBNZ Lowers Key Rate
The New Zealand Dollar fell earlier after the Reserve Bank of New Zealand lowered its benchmark rate. Though widely expected, investors were dismayed when the RNBZ governor hinted at further rate cuts if the situation in China’s economy continued to deteriorate. Given that likelihood, the RBNZ lowered its growth outlook and said that unless China’s economy recovered the RBNZ would consider a future with a record low 2% interest rate.
As reported at 10:57 am (BDT) in London, the NZD/USD was trading at $0.6308, bouncing higher from the session low of $0.6255, which was a loss of more than 2% for the Kiwi. The AUD/NZD is higher at NZ$1.1225, a gain of 1.18% for the Aussie Dollar which comes on the back of Australia’s improved employment figures.
Yen Pressured on Official Comments
Also in Asia, the Japanese Yen was under pressure after one Japanese official hinted at the likelihood of more easing from the Japanese central bank. The Bank of Japan will next be meeting on October 30th when any changes to current monetary policy will be considered. The USD/JPY pair traded at 121.74 Yen, a gain of 0.74%; the pair ranged from 119.9845 Yen at the low end to 121.3205 Yen at the top. Analysts point out that the market’s reaction to the official’s comments were simply a knee-jerk one, and given that he is not a member of the voting board of the Bank of Japan they should carry very little weight.