The New Zealand Dollar fell against the Pound and slumped to a two-week low against the US Dollar after the US Federal Reserve minutes for July combined with the New Zealand Reserve Banks plans to impose restrictions on home lending.
The Federal Reserve minutes showed that there was broad support for the Central Bank’s plan to start slowing the pace of its $85 billion a month bond-buying programme. Investors are now predicting that any scale down will occur next month, which will give the US Dollar a boost.
“The Fed minutes sharpened everyone a little that it’s a question of when, not if, on tapering,” said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney. “The kiwi has been heavy through it all.”
Comments made on Wednesday by the New Zealand Reserve Bank that it is planning on imposing restrictions on home lending to help curb the country’s overheating property market. The comments weighed upon the ‘kiwi ‘after they reduced the chance of an interest rate hike to head off the demand for housing.
CBA’s Tennent-Brown said the market had started pricing in a faster track of rate hikes than what was being forecast, and that’s cooled since the RBNZ announced the restrictions on Tuesday.
“It will be interesting when we get the next MPS (monetary policy statement) in a few weeks to see if the Reserve Bank has altered what they expect the cash rate to be doing,” he said.
The currency’s losses were restricted after data out of China showed that the world’s second biggest economy’s manufacturing sector grew for the first time in four months.
Current New Zealand Dollar (NZD) Exchange Rates:
The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.7849 <
The New Zealand Dollar /Euro Exchange Rate is currently in the region of: 0.5880 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5037 <
The New Zealand Dollar /Australian Dollar Exchange Rate is currently in the region of: 0.8706
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.7006 >
The Australian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1485 >
The Canadian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.2157 >
(Correct as of 10:30 am GMT)
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