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The RBNZ and FED monetary policy announcements as widely expected

Written by Sam Coxhead on January 31st, 2013.      0 comments

9:25 AM (NZT) The RBNZ just left the NZ cash rate steady at 2.50% as expected.
The accompanying statement acknowledged the overvalued NZD weighing on inflationary pressure in the short term, and making trading conditions hard for the export and import competitor sectors. Growth is expected to continue to recover from the softness see in mid-2013 , aiding by the gathering momentum in the Christchurch rebuild. Interesting, the RBNZ will watch housing demand and housing credit growth with financial stability in mind.
The NZ dollar has reacted by seeing increased demand, which is not surprising following the weak price action over the last 12 hours.
In the offshore session overnight, improved sentiment in Europe continued and the demand for EURO saw the Australasian currencies under pressure. The US 4th quarter GDP numbers was much weaker than expected at -.1% (+1.1% exp). The headline number was not as weak as the detail suggests, but highlights further the impact that lowering Govt spending in the US will have on the wider economy.
UK Manufacturing, European inflation and unemployment numbers and US employment numbers will round out the weeks focus from here.
Currency pair Current level Pre-RBNZ Percentage change 24 hour range
NZDUSD 0.8342 0.8309 0.40% 0.8298 0.8396
AUDUSD 1.0409 1.0404 0.05% 1.0405 1.0474
NZDAUD 0.8017 0.7986 0.39% 0.7969 0.8016
AUDNZD 1.2473 1.2522 -0.39% 1.2475 1.2549
NZDGBP 0.528 0.5260 0.38% 0.5257 0.5326
NZDEUR 0.6147 0.6127 0.33% 0.6115 0.6222
NZDJPY 76.06 75.80 0.34% 64.64 65.40
NZDCAD 0.8360 0.8322 0.46% 0.8041 0.8148