Back
11 Dec 2014
RBNZ retains tightening bias – TradeTheNews
FXStreet (Barcelona) - The TradeTheNews Team note that RBNZ kept the tightening bias intact, keeping rates on hold as expected, sending NZD/USD higher about 150pips.
Key Quotes
“Reserve Bank of New Zealand was on hold at 3.50% as expected, also lowering its 90-day bill rate from prior forecasts by 10bps at 2014-end, 30bps at 2015-end, and 40bps at 2016-end. RBNZ reiterated the high exchange rate still restrains growth in the traded sectors and yet to adjust materially to the lower commodity prices, but also added that "some further policy tightening will be necessary to keep future average inflation near the 2% target mid-point and ensure that the economic expansion can be sustained."”
“NZD/USD spiked up about 150pips on that statement component, as investors anticipated a decidedly neutral bias from the RBNZ due to recent pressure in dairy prices and lower inflation expectations. Speaking after the policy announcement, Gov Wheeler clarified the RBNZ would be on hold for a long time, expressing surprise the markets interpreted the statement as a tightening signal.”
Key Quotes
“Reserve Bank of New Zealand was on hold at 3.50% as expected, also lowering its 90-day bill rate from prior forecasts by 10bps at 2014-end, 30bps at 2015-end, and 40bps at 2016-end. RBNZ reiterated the high exchange rate still restrains growth in the traded sectors and yet to adjust materially to the lower commodity prices, but also added that "some further policy tightening will be necessary to keep future average inflation near the 2% target mid-point and ensure that the economic expansion can be sustained."”
“NZD/USD spiked up about 150pips on that statement component, as investors anticipated a decidedly neutral bias from the RBNZ due to recent pressure in dairy prices and lower inflation expectations. Speaking after the policy announcement, Gov Wheeler clarified the RBNZ would be on hold for a long time, expressing surprise the markets interpreted the statement as a tightening signal.”