NZD rallies following RBNZ rate cut & Aussie holds steady

August 11, 2016

NZ central bank decided to cut interest rates to a record low, as it was pressuring the export and import competing sectors.

NZD rallies following RBNZ rate cut & Aussie holds steady

This article is originally referred from FXNet Market News

The New Zealand Dollar hit one month high against the US dollar after the central bank decided to cut interest rates to a record low.

NZD/USD added 0.54 percent trading at 0.7252, its highest level since the 13th of July.

This happened after the Reserve Bank of New Zealand (RBNZ) decided to lower its benchmark interest rate to 2 percent from 2.25 percent at the end of its policy meeting. RBNZ Governor Graeme Wheeler stated that the interest rate needed to be lowered because it was adding pressure to the export and import competing sectors. “This makes it difficult for the bank to meet its inflation objective” Wheeler said.

The kiwi had hit one year high following the decision, trading at 0.7351 dollars, its highest level since May of 2015.

The Australian dollar held steady following the news; AUD/USD was near three months high at 0.7707.

Elsewhere the euro was at 1.1172 dollars against its US counterpart, 0.7 percent higher for the week. The US dollar added 0.2 percent against the Japanese yen trading at 101.41.

“yen-buying has been increasing because of an improvement in the [Japanese] trade balance” Satoshi Okagawa, a senior global market analyst from Sumitomo Mitsui Banking Corporation in Singapore said.

Later in the day US Jobless claims report will be released, while on Friday US retail sales data will be out.

The US dollar index which measure the greenback against a basket of six other major currencies added 0.09 percent trading at 95.69.

Original Source: FXNet Market News

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