Forex Marketz Daily Forex News – Fully Markets Update
There is a lot of news this morning surrounding the Reserve Bank of New Zealand (RBNZ). From a monetary rate decision to RBNZ Governor Graeme Wheeler speaking to the Select Committee of the country’s Parliament to try to talk the Kiwi dollar lower.
The New Zealand dollar (NZD/USD) and front end government bond yields, at first, struggled to find direction as August’s RBNZ rate decision crossed the wires. After Wheeler’s comments, the currency and treasuries climbed their way out of sideways trade. The markets started to digest RBNZ policy statement.
At first, the RBNZ started with an argument that might have prevented a complete NZD lift-off. The central bank forecasted their official cash rate (OCR) rising in the third quarter of 2019. This is not aligned with overnight index swaps. They are pricing in a better than even chance of a rate hike by August 2018. The monetary policy officials of the bank also reiterated there are many uncertainties still in play. Monetary policy may need to be adjusted accordingly.
RBNZ Keeps the Kiwi Trading Steady
The central bank cooled off pessimism over the weak second quarter inflation report. While the central bank expects a soft consumer price index (CPI) over the coming months, they sees prices hitting two percent in the first quarter versus the older second quarter view. Also, Governor Graeme Wheeler said that CPI remains within the target range. He also said that economic growth is expected to improve in the months ahead.
As mentioned above, Wheeler tried to jawbone the Kiwi dollar lower. This morning, the RBNZ Governor spoke to the Select Committee of the country’s Parliament. He was unusually explicit for a central banker on the subject of the Kiwi dollar. However, the Kiwi dollar barely budged.
