Currency talk: China concerns still weighing on the kiwi dollar
Jason Walls and BNZ's Jason Wong discuss the global currency market news. With special audio feature.
Jason Walls and BNZ's Jason Wong discuss the global currency market news. With special audio feature.
Further monetary stimulus from China’s central bank has led to the New Zealand dollar gaining value against the greenback.
In the space of a week, the kiwi dollar has gained almost 2.5c against the greenback.
Last week, the People’s Bank of China (PBoC) reduced the reserve requirement ratio (RRR) by 50 basis points to 16.5%.
BNZ currency strategist Jason Wong says this is basically a form of monetary policy easing.
“We saw a lot of Asian currencies appreciate against the US dollar on the back of that announcement and the New Zealand dollar got dragged up with them,” he says.
As well as this, there was also a mixed bag of US data out this week.
“There was strong employment data, so the labour market is reasonably tight.
“But on the other hand, there was very weak wage inflation data in the US.”
He says this prompted the view that the US Federal Reserve should be “in no hurry to tighten monetary policy.”
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