Australia MI Inflation Expectations 3.0 %, Previous: 3.6 %
RBNZ: Further Easing May Be Appropriate, Depends On Data
RBNZ: Rate Cut Appropriate Given Low Inflation Pressure
RBNZ: NZ$ Remains Overvalued
RBNZ: Sees Inflation Accelerating As Currency Declines
RBNZ Governor Wheeler: NZD Still Has A Significant Way To Fall
RBNZ Governor Wheeler: Market Forecasts See One Further Rate Cut
The New Zealand Dollar fell sharply overnight, after the RBNZ cut rates unexpectedly. The statement from the central bank was very dovish, suggesting another 25bps rate cut will follow soon, perhaps even next month. Governor Wheeler said that the NZD remains overvalued has still a significant way to fall. NZD/USD fell from 0.72 to a low of 0.7020 and later extended losses to 0.7010. Immediate support seen at 0.70, but it seems that is just a matter of time until we see the pair trading with a .69 handle. The big moves were seen in the cross pairs – GBP/NZD rallied more than 600 pips to a high of almost 2.2150, while AUD/NZD took out the 1.10 resistance level and EUR/NZD broke through 1.60. The outlook for the Kiwi Dollar remains negative and further losses against the other major currencies highly likely.
Overnight, we also got Australian employment data. The headline number beat expectations, arriving at 42,000 vs 11,000 expected. AUD/USD rallied from 0.7710 to 0.7790 and has settled in a 0.7760-75 range for the past 3 hours. Decent resistance seen at 0.7820 and a break above would pave the way for a 0.80 test.