The New Zealand dollar remains unstoppable, extending its rally against the US dollar for the eighth consecutive day to test prices above 0.6900 for the first time since early April 2019. The pair has lost momentum during the US session although it remains supported above 0.6875.
The NZD/USD rally has been unfazed by the Reserve Bank of New Zealand’s slightly dovish message, reiterating their willingness to provide further monetary stimulus to the economy in order to meet their employment and inflation targets.
The RBNZ has maintained its benchmark interest rate unchanged at 0.25% and the target of its Large Scale Asset Purchase Program at NZD100 B. The biggest change has been related to the prospect of negative interest rates, looking now less likely in hopes of a vaccine in the mod-term. This and the comments about the resilience of the economic data have provided a fresh impulse to the NZD today.
We see the Kiwi approaching the 70 cent level, which is a key phycological high for the risk on the crowd to breach, especially with an undertone of a weaker US$.
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