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Friday, August 12, 2022
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New Zealand dollar up as RBNZ keeps rates unchanged

RBNZ

The Reserve Bank of New Zealand kept its interest rate unchanged at 0.25% as it handed down its policy decision

The dollar was down on Wednesday morning in Asia, while the New Zealand dollar (NZD) was up after the Reserve Bank of New Zealand (RBNZ) handed down its latest policy decision.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped 0.08% to 93.073 by 3:51 AM GMT.

The USD/JPY pair rose 0.05% to 109.62.

The AUD/USD pair gained 0.23% to 0.7265, while the NZD/USD pair added 0.28% to 0.6943.

The USD/CNY pair added 0.03% to 6.4835 while the GBP/USD pair gained 0.12% to 1.3756.

Earlier in the day, RNBZ kept its interest rate unchanged at 0.25% as it handed down its policy decision. The central bank was forced to postpone its plans to hike interest rates as lockdown measures were imposed across New Zealand after the first COVID-19 local infection in six months.

RBNZ was ready to pull the trigger, COVID-19 comes along 24 hours earlier and so they’ve just pulled back on that, BNZ senior market strategist Jason Wong told Reuters.

Investors are now pricing a 60% chance of a hike in October.

However, other investors had the focus elsewhere.

The dollar is being supported by the nervous risk environment. Markets are paying attention to the COVID-19 Delta variant and the area which is of most concern seems to be China, Bank of Singapore currency analyst Moh Siong Sim told Reuters.

Investors are now focussing on the minutes from the U.S. Federal Reserve’s latest meeting, due to be released later in the day, for clues to the central bank’s timeline for asset tapering and interest rate hikes. The Fed’s Jackson Hole symposium in the following week could also provide more clues.

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