New Zealand Dollar Advances After RBNZ Holds Rate Steady
The New Zealand dollar spiked higher against its major trading
partners in the Asian session on Wednesday, as New Zealand's
central bank left its monetary policy unchanged and agreed to cut
its interest rates further if required as the economic outlook
remains highly uncertain.
The Monetary Policy Committee of the Reserve Bank of New Zealand
decided to keep the Official Cash Rate at 0.25 percent and the
Large Scale Asset Purchase at NZ$100 billion. The Funding for
Lending programmes were also kept unchanged.
The committee agreed to retain its current expansionary monetary
setting until consumer price inflation will be sustained at the 2
percent target, and that employment is at or above its maximum
The MPC said it is prepared to lower the benchmark rate if
The committee observed that short-term data continues to be
highly variable as a result of the economic impacts of
Over the medium-term, the outlook remains highly uncertain,
determined in large part by both health-related restrictions, and
business and consumer confidence, the MPC said.
The currency was further underpinned by rising risk appetite, as
the pick up in U.S. consumer prices was not swift enough to
necessitate a policy change by the Federal Reserve.
U.S. bond yields eased as the government's auction of 30-year
bonds was met with strong demand.
The kiwi climbed to a 2-day high of 77.27 against the yen, after
a fall to 76.72 at 10:00 pm ET. The kiwi is likely to locate
resistance around the 79.00 level.
The kiwi appreciated to 0.7097 against the greenback, which was
its highest level since March 23, from a low of 0.7044 seen at 5:15
pm ET. Next immediate resistance for the kiwi is seen near the 0.72
The kiwi was up against the euro, at a 5-day high of 1.6858.
This followed a low of 1.6963 set at 10:00 pm ET. On the upside,
1.62 is possibly seen as its next resistance level.
The kiwi approached near a 2-week high of 1.0803 against the
aussie, after falling to 1.0841 at 10:00 pm ET. If the kiwi rallies
again, 1.06 is seen as its next resistance level.
The latest survey from Wetspac Bank and the Melbourne Institute
showed that Australia's consumer confidence spiked in April -
jumping 6.2 percent on month to a reading of 118.8.
That's the highest reading for the index since August 2010.
Looking ahead, Eurozone industrial production for February is
due in the European session.
U.S. import and export prices for March, as well as Fed Beige
book report are slated for release in the New York session.