The New Zealand dollar dropped sharply against the US counterpart and other majors, while the NZD/USD recorded the lowest level at 0.8002 after the Reserve Bank of New Zealand rate decision.
The RBNZ governor Mr. Alan bollard kept benchmark interest unchanged at a record low at 2.50% during the month of April to revive the economy.
The Governor and his board said that the continuing rise for the nation currency is “unwelcome” which has negative results on the nation’s exports; also they noted the outlook for the New Zealand economy remains very uncertain.
The New Zealand monetary policy makers will keep the rates unchanged steady at 2.50% this year due to the expected slow economic growth. In March, Bollard cut the key rate by half a percentage point after earthquakes.
At the meantime, New Zealand dollar fell for a third straight day versus the Japanese yen after Bollard said the economic outlook “remains very uncertain”.
Early Friday in New Zealand, the economy will release trade balance for March at 22:45 GMT (Thursday) where it’s expected to show a widening surplus to NZ$200 million compare with the previous surplus of NZ$194 million.
The exports are expected to come at NZ$4.20 billion rising from the previous of NZ$3.87 billion. As for imports they are expected at NZ$3.90 billion rising from the previous reading of NZ$ 3.68.
On Friday, the US is to release the Income Report for March at 12:30 GMT. Expectations indicate income to rise to 0.4% from 0.3% while spending will decline to 0.5% from 0.7%. Core PCE is expected with a drop on the month to 0.1% from 0.2% and steady on the year at 0.9%.
Furthermore, the world’s largest economy is to release the Chicago PMI for April at 13:45 GMT and expected to slow to 68.2 from 70.6. The US University of Michigan confidence final reading for the month of April is due at 13:55 GMT and expected with an upside revision to 70.0 from 69.6.
Originally posted here
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