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Weekly roundup: Dovish RBNZ outlook weighs heavily on New Zealand dollar demand

currency-newsWeekly roundup: Dovish RBNZ outlook weighs heavily on New Zealand dollar demand
The New Zealand dollar weakened in the wake of the Reserve Bank of New Zealand’s (RBNZ) interest rate decision meeting as the RBNZ noted the need for further fiscal support for the New Zealand economy.
 
Although policymakers opted to leave interest rates unchanged at this stage, markets remain mindful of the possibility of a potential cut in the months ahead.
 
Even so, NZD exchange rates found renewed support as a solid month of Chinese industrial profits stoked market risk appetite, after both NZD and AUD suffered losses last week in risk-off trade.
 
Demand for the Australian dollar also improved in response to the data, given its common role as a proxy for market sentiment towards the Chinese economy.
 
A solid performance from September’s Chinese manufacturing PMI could similarly benefit both antipodean currencies this week.
 
However, if New Zealand’s ANZ business confidence index remains deeply in negative territory, a sense of anxiety over the economic outlook could drag on the New Zealand dollar.
 
Meanwhile, AUD exchange rates may come under renewed pressure as forecasts point towards a sharp contraction in August’s Australian retail sales.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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