Investing.com - " The New Zealand dollar traded lower against
its U.S. rival during Thursday's Asian session from Reserve Bank of
New Zealand Governor Graeme Wheeler.
In Asian trading Thursday, NZD/USD fell 0.19% to 0.8253. The pair
subsequently consolidated at 0.8269, edging up 0.18%.
Earlier Wednesday, RBNZ opted to keep rates at a record low of
2.5%. However, that may not have been the biggest news pertaining
"Sustained strength in the exchange rate that leads to lower
inflationary pressure would provide the bank with greater
flexibility as to the timing and magnitude of future increases in
the OCR," said Wheeler in a statement released earlier in the
Traders interpreted those remarks to mean that a rate hike from
RBNZ is further off than previously expected. For much of this
year, it was believed the central bank would become one of the
first in the developed world to raise rates, but even that was not
expected to happen until the first or second quarter of 2014.
RBNZ has resisted quantitative easing and rate cuts unlike many of
its developed world counterparts.
"The extent and timing of the rise in the policy rate will depend
largely on the degree to which momentum in the housing market and
construction sector spills over into broader demand and inflation
pressures," according to Wheeler's statement.
Of rising property values, Wheeler said, "Recently introduced
restrictions on high loan-to-value mortgage lending are expected to
help slow house price inflation and the bank will continue to
monitor the situation closely."
On Wednesday it was revealed Moody's Investors Service recently
considered stripping New Zealand of its AAA sovereign debt rating
due in part to the country's widening account deficit. Moody's is
the only one of the three major ratings agencies to have an AAA
rating on New Zealand.
Elsewhere, NZD/JPY fell 0.19% to 81.27 while AUD/NZD rose 0.28% to
offers an extensive set of professional tools for the financial
Read more News on Investing.com and download the new Investing.com
Stocks & Finance App