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NZD/USD: the need for a rapid easing of monetary policy is not _23/08/2016

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In late July, the RBNZ presented a report stating that persists for a long time, low inflation and a high rate of New Zealand currency, increasing pressure on the milk and the processing industry, is a negative factor for the development of the national economy. Graham Wheeler then noted that "the need to further easing of monetary policy to ensure that the average inflation rate in the region of the middle of the target range", which is 1% -3%.

Today the head of the RBNZ Graeme Wheeler said that he did not see the need for a rapid easing of monetary policy.

And, although Wheeler noted that the central bank expects another moderate decline in official interest rates, as well as that the RBNZ is still committed to achieving the target of inflation expectations for the next sharp decline in rates of 0.5% have been dispelled.

The pair NZD / USD jumped more than 0.5% to 0.7320. With the opening of the European session, the pair continues to grow, and the price nearly touched the mark of 0.7340.

Earlier in August, the RBNZ cut its official interest rate by 0.25% to a new low of 2.0% and announced a commitment to loose monetary policy.
Now, market participants expect that the key interest rate RBNZ to August 2017 will decrease to 1.50%.

Despite the current rate of 2.0%, it remains one of the highest among advanced economies, and this will also contribute to the attractiveness of New Zealand currency for investors.

Restrained the Fed's policy on interest rate rises in the US, despite the active verbal intervention by the Fed the possibility of an early rate hike, will weaken the US dollar on the currency market.

Thus, in the long term, at least until the end of the year, we should expect the positive dynamics of the pair NZD / USD

Tuesday, 23 Aug, 2016 / 10:42

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