28 Apr 2016
Lower New Zealand dollar is desirable - Westpac
Analysts at Westpac explained the conditions surrounding today's RBNZ event.
Key Quotes:
"The RBNZ announced the cash rate would remain at 2.25% but also that further easing was expected. However, the guidance did not clearly signal the next cut would be in June.
Governor Wheeler also declared that a “lower New Zealand dollar is desirable to boost tradables inflation and assist the tradables sector.”
Given that markets had priced in almost 50% chance of a rate cut today, there was a scramble in response, with yields rising and NZD/USD jumping from 0.6840 to highs around 0.6940."
Key Quotes:
"The RBNZ announced the cash rate would remain at 2.25% but also that further easing was expected. However, the guidance did not clearly signal the next cut would be in June.
Governor Wheeler also declared that a “lower New Zealand dollar is desirable to boost tradables inflation and assist the tradables sector.”
Given that markets had priced in almost 50% chance of a rate cut today, there was a scramble in response, with yields rising and NZD/USD jumping from 0.6840 to highs around 0.6940."