NZ Dollar Stable After RBNZ Refrains from Interest Rate Cut

The New Zealand dollar was trading either flat or a little higher against most-traded currencies today. The Reserve Bank of New Zealand did not cut interest rates at today’s meeting but signaled that a cut is possible in the future. The trade balance worsened more than was expected.
The RBNZ left its main interest rate at 1% as was largely expected by market participants. The central bank did not signal about a need for lower interest rates in the immediate future:

The Monetary Policy Committee agreed that new information since the August Monetary Policy Statement did not warrant a significant change to the monetary policy outlook.

But the bank signaled that it is ready to lower rates if necessary:

The Committee agreed that developments since the August Statement had not significantly changed the outlook for monetary policy. They reached a consensus to keep the OCR at 1.0 percent and that, if necessary, there remains scope for more fiscal and monetary stimulus.

Statistics New Zealand reported that the trade balance deficit widened to NZ$1,565 million in August from NZ$700 million in July. That was a bigger deficit than NZ$1,190 million predicted by experts. Furthermore, that was the third largest deficit since the survey started.
NZD/USD was little changed at 0.6322 as of 9:49 GMT today. EUR/NZD fell from 1.7422 to 1.7396, touching the low of 1.7325 intraday. NZD/JPY was up from 67.67 to 67.83, while its daily high was at 68.18.

If you have any questions, comments, or opinions regarding the New Zealand Dollar, feel free to post them using the commentary form below.

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