Great week for Kiwi bulls with a surprise rally after a dovish RBNZ statement, and possibly on growing positive global sentiment as major central banks are expected to ease interest rates.
New Zealand Headlines and Economic data
- New Zealand credit card spending rose 6.6% y/y in May vs. 4.5% in June
- The New Zealand dollar started the week on a strong footing, possibly running higher with the Aussie after comments from Reserve Bank of Australia Governor Lowe were taken as a signal of a lower probability the RBA will cut.
- NZ central bank stands pat, flags more easing to combat risks to growth
- NZ dollar firms after RBNZ holds rates; eyes on China-US trade talks – Kiwi pairs instantly fell on the release of the statement, but didn’t stay down for long as the spiked higher in the next few minutes. The New Zealand Herald article in the link argues that the actual statement wasn’t as dovish as the simultaneously released monetary policy committee’s record of meeting, which could explain the bullishness after the initial dip. It’s also likely that it was a rally on profit taking as NZD pairs did drop back a bit before the event, and/or the idea that with central banks likely to ease further across the world (including fresh comments from the Federal Reserve), risk assets/higher-yielders will continue to see support.