30 Jan 2014
NZD/USD in choppy trading ahead of Wheeler speech
FXstreet.com (London) - NZD/USD remains in mildly bearish territory ahead of today’s speech by Reserve Bank of New Zealand governor, Graeme Wheeler.
Yesterday the RBNZ voted to hold the overnight cash rate at 2.5 percent, although Wheeler remained hawkish in his outlook, stating that “ There is a need to return interest rates to more-normal levels.”
NZD put under pressure despite rate hold expectations
The pair sold off strongly overnight, despite the rate hold being widely anticipated. Consensus expectations are for the RBNZ, perhaps the most hawkish of the G10 central banks, to hike rates by the end of the first quarter – something that RBNZ governor Wheeler may set out in today’s speech.
Much of the selling of NZD/USD came in spite of the RBNZ, with the unanimous decision by the Federal Reserve’s Federal Open Market Committee to cut monthly asset purchases by a further USD10bn implicitly giving a vote of confidence in the outlook for the US economy. The cut, despite the poor jobs numbers at the beginning of the month, suggests that barring a major dip in the US economy, the Fed will continue with a programme of winding up its QE purchases by the end of 2014.
NZD/USD is currently trading at USD0.8143, up from a session low of USD0.8137 on choppy trading.
Yesterday the RBNZ voted to hold the overnight cash rate at 2.5 percent, although Wheeler remained hawkish in his outlook, stating that “ There is a need to return interest rates to more-normal levels.”
NZD put under pressure despite rate hold expectations
The pair sold off strongly overnight, despite the rate hold being widely anticipated. Consensus expectations are for the RBNZ, perhaps the most hawkish of the G10 central banks, to hike rates by the end of the first quarter – something that RBNZ governor Wheeler may set out in today’s speech.
Much of the selling of NZD/USD came in spite of the RBNZ, with the unanimous decision by the Federal Reserve’s Federal Open Market Committee to cut monthly asset purchases by a further USD10bn implicitly giving a vote of confidence in the outlook for the US economy. The cut, despite the poor jobs numbers at the beginning of the month, suggests that barring a major dip in the US economy, the Fed will continue with a programme of winding up its QE purchases by the end of 2014.
NZD/USD is currently trading at USD0.8143, up from a session low of USD0.8137 on choppy trading.