Currency talk: NZ dollar flat despite an eventful last week
Jason Walls and BNZ's Jason Wong discuss the global currency market news. With special audio feature.
The New Zealand dollar remained relatively flat last week, despite a few pieces of important economic information being revealed.
The first was the Reserve Bank keeping interest rates on hold at 2.5%. Although this was expected, all eyes were on the wording of the official cash rate (OCR) statement to see if there were any clues about what governor Graeme Wheeler was planning to do with the OCR in the coming months.
The wording of the statement suggested the Reserve Bank was on an easing bias, with the governor leaving the door open – albeit just a crack – for another cut.
“Some further policy easing may be required over the coming year to ensure that future average inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data,” Mr Wheeler said last week.
BNZ currency strategist Jason Wong says the Reserve Bank will be mindful of the economic data from here on out, especially the core inflation figures.
Fonterra also made a significant announcement last week when it slashed its payout to farmers by 45c per kg/MS.
The payout will now be $4.15 kg/MS, down from $4.60 kg/MS previously.
Mr Wong says there was just a small reaction from the kiwi dollar when this news came out.
“While the timing of that announcement was a bit of a surprise, the overall message was not really big news,” he says.
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Tue, 02 Feb 2016
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Currency talk: NZ dollar flat despite an eventful last week
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