20 Jul 2015
RBNZ could ease further – RBS
FXStreet (Edinburgh) - FX Strategist Greg Gibbs sees the RBNZ lowering further its benchmark rate this week.
Key Quotes
“After last week’s soft CPI data and weak milk auction, a 25bp rate cut from the RBNZ this week looks extremely likely”.
“The market agrees and has it priced in (56bp of cuts over the coming year). We also expect the central bank to leave unchanged its assessment that “further significant downward adjustment is justified” for the exchange rate”.
“The market may baulk at selling the NZD near its lows since 2009 after a relatively rapid fall in recent months, but this fall is in-line with the lower interest rates and lower commodity prices, and risk is biased towards further falls in coming weeks in our view”.
“It appears likely on track to reach down to around more significant longer term support near .60/.61”.
Key Quotes
“After last week’s soft CPI data and weak milk auction, a 25bp rate cut from the RBNZ this week looks extremely likely”.
“The market agrees and has it priced in (56bp of cuts over the coming year). We also expect the central bank to leave unchanged its assessment that “further significant downward adjustment is justified” for the exchange rate”.
“The market may baulk at selling the NZD near its lows since 2009 after a relatively rapid fall in recent months, but this fall is in-line with the lower interest rates and lower commodity prices, and risk is biased towards further falls in coming weeks in our view”.
“It appears likely on track to reach down to around more significant longer term support near .60/.61”.