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Forex - NZD/USD tumbles to 10-week low after Key rate cut remarks

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Forex Pros - The New Zealand dollar tumbled to a 10-week low against its U.S. counterpart on Wednesday, after Prime Minister John Key said he expected the central bank to cut interest rates next week after the devastating earthquake in Christchurch.

NZD/USD hit 0.7384 during late Asian trade, the pair's lowest since December 20; the pair subsequently consolidated at 0.7403, tumbling 0.90%.

The pair was likely to find support at 0.7345, the low of December 20 and resistance at 0.7480, the days high.

The kiwi's losses came after Prime Minister Key said earlier that rate cuts by the central bank "would probably be our expectation."

"I don't think there is any question that it is helpful if there are lower interest rates to reflect what we are going through at the moment," he said.

The Reserve Bank of New Zealand made no comment on the prime minister's remarks.

The kiwi was also sharply lower against the euro, with EUR/NZD surging 0.86% to hit 1.8593.

Later Wednesday, Ben Bernanke was to testify for a second day before the Senate Banking Committee, while the Fed was to publish its Beige Book. The U.S. was also to publish data on private sector payrolls compiled by payroll processing firm ADP.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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