The New Zealand dollar rallied during early hours of the Tuesday’s trading session as Graeme Wheeler, Reserve Bank of New Zealand Governor, signaled that the central bank is not in a hurry to continue interest rate cuts. Yet the currency had troubles keeping its gains.
Wheeler was delivering a speech titled “Monetary policy challenges in turbulent times,” during which he said:
We do not believe that the outlook and balance of risks warrants a position of no policy change, nor a position of rapid easings. If the emerging information and risks unfold in a manner that warrants a change in our judgements, we will modify our policy settings and outlook.
Earlier this month, he signaled after cutting rates that additional monetary easing is likely. It is not surprising that the currency firmed after the Governor had downplayed chances for further cuts.
The kiwi is attempting to preserve its gains right now, but is struggling to do so. The likely reasons for this are prospects for tighter monetary policy from the Federal Reserve and uncertainty ahead of the meeting of central bankers in Jackson Hole.
NZD/USD was up from 0.7268 to 0.7296 as of 00:08 GMT today but backed off from the session high of 0.7320. EUR/NZD traded at 1.5510 after opening at 1.5566 and falling to 1.5443. NZD/JPY opened at 72.89, climbed to 73.46 but retreated to 73.07 as of now.
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