Kiwi outperforms on RBNZ Governor comments

Aug 23 03:08 2019 Print This Article

 

Waiting until November

The New Zealand dollar was the best performing Asian currency during this morning’s session after RBNZ Governor Orr said that the central bank will do whatever is necessary to support the local economy, but can afford to wait and see what is happening. This implies that the Bank will be monitoring the impact of the bigger-than-expected cut in the official cash rate on August 7 and, if things appear to be going well, may hold off on further cuts in the near term.

He added that the RBNZ will likely wait until November and possibly cut if necessary. Currently, interest rate markets are assigning a 70% probability of a 25 bps cut at that meeting, with just an 11% chance for September.

In response to the comments, the Kiwi advanced versus the US dollar and the Japanese yen, with NZD/USD potentially facing the first up-day in three days. NZD/USD was up 0.45% at 0.6393 while NZD/JPY climbed 0.51% to 68.111 by lunch.

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