The New Zealand dollar was strong today, rising to the highest level since September versus the US dollar and the highest since March against the Japanese yen, after the Reserve Bank of New Zealand left its benchmark Official Cash Rate unchanged.
The RBNZ left its main interest rate at 2.5 percent. Governor Graeme Wheeler said in the statement:
Economic growth has slowed in recent months and has been accompanied by low inflation and rising unemployment. However, over the next two years, growth is expected to accelerate to between 2.5 and 3 percent per annum.
The outlook for the global economy was not great, but has improved since the last assessment:
The global outlook remains soft but appears less threatening than was the case earlier in the year.
In general, the statement was fairly hawkish:
The overall outlook is for stronger domestic demand and the elimination of current excess capacity by the end of next year. This is expected to cause inflation to rise gradually towards the 2 percent target midpoint.
NZD/USD rose from 0.8285 to 0.8320 as of 22:33 GMT today and its daily high of 0.8346 was the highest since September 28. NZD/JPY climbed from 68.31 to 68.53, while the daily maximum was at 68.71 — the highest since March 21.
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