On Thursday the New Zealand dollar
significantly rose against the greenback and hit a one-year high. The kiwi pinned a remarkable growth of 1.8% after the Reserve Bank of New
Zealand left the official cash rate in the country unchanged at 2.25
percent, which surprised
some
market participants who forecasted a rate cut.
In the early trading NZD/USD increased to 0.71469, boosted by the RBNZ decision and the recently weak US data that might bring further
gains for the kiwi.
But RBNZ would be more confident to have a weaker exchange rate of the local currency in order to ensure that the future average inflation settle close to the
middle of the target level. In view of the sharp appreciation this would
be difficult to achieve without one further OCR cut
in next months. Most probably this will happen during the next meeting of the institution
in August.
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