Get a free Quote

From CCY
please type the characters you see:
(spam filter)
spam control image

Apply now

Obligation free account and currency commentary btn_apply_for.gif
Browse By Topic

FX News

Most recent FX News:

Read more

The RBNZ leaves the cash rate unchanged, NZD slightly weaker across the board.

Written by Sam Coxhead on September 15th, 2011.      0 comments

9:22 AM (NZT) Allan Bollard just left the NZ cash rate unchanged at 2.5% as widely expected. In the accompanying statement and press conference he has pointed out that whilst the NZ domestic economy has been more robust than expectations the international outlook is bleak and this will have a dampening effect. Compounding issues is the fact that international funding markets are showing signs of tightening, and whilst not an issue currently, the impact will be mean higher borrowing costs flowing through from the banks to lending rates throughout the economy.
Whilst the headline inflation remains above the target band, once the effects of last year’s GST flow out of the equation, the core inflation number will be closer to 2%. Because of the international situation it remains prudent to maintain the cash rate at 2.50%. They expect to raise the cash rate at some stage in the coming year, as the market has priced.
Bollard does state that the NZD is overvalued against long term fundamentals.
Elsewhere in offshore markets overnight the sentiment was a little more stable. US data was slightly worse than expectation in both retail sales and business inventory numbers. But further references to the potential for “Euro-bonds” from EU officials and German and French pledges of support to the Greek government helped the tone. Adding to the relative stability was the passing of austerity measures by the Italian government. Credit downgrades have started on European banks, but these were largely expected. French banks Soc Gen and Credit Agricole saw their long term credit ratings downgraded and it seems to be a matter of time before similar downgrades are applied to German banks. Rumours of the BRIC countries spreading their vast EUR currency reserves into the peripheral states from Germany and France,  has also seen some sold EUR position covering from investors.
          Past 24 hours
  Current level Pre- RBNZ  % Chge RBNZ   Low High
NZD/USD 0.8192 0.8223 -0.38%   0.8139 0.8265
AUD/USD 1.0264 1.0282 -0.18%   1.0173 1.0371
NZD/AUD 0.7981 0.7999 -0.23%   0.7953 0.8047
AUD/NZD 1.2530 1.2502 0.23%   1.2427 1.2574
NZD/GBP 0.5195 0.5215 -0.38%   0.5170 0.5226
NZD/EUR 0.5959 0.5981 -0.37%   0.5949 0.6028
NZD/YEN 62.80 63.02 -0.35%   62.56 63.57
NZD/CAD 0.8115 0.8143 -0.35%   0.8073 0.8176