RBA rate cut decision good for Kiwi dollar
(06 December 2012 – New Zealand) The New Zealand dollar moved higher after the Reserve Bank of Australia (RBA) cut interest rates, soothing fears Australia’s economy could be in for a big fall.
As New Zealand’s largest trading partner, the Aussie dollar has a large impact on Trans-Tasman economic relations.
The kiwi increased to 82.43 US cents on Wednesday at 8am in Wellington from 82.29 cents the day before, following the Australian dollar's lead, which rose to US$1.0472 from US$1.0446. The kiwi was little changed at 78.68 Australian cents from 78.73 cents on Tuesday.
Bank of New Zealand (BNZ) strategist, Kymberly Martin said while the RBA’s accompanying statement highlighted the negatives, there were no new negatives so markets were happy to take no news as good news.
'If the RBNZ comes out and points to the obvious things about the economy and provides no new fears, we might have a similar reaction.'
The RBA's review comes two days before the Reserve Bank of New Zealand (RBNZ) reviews monetary policy, with RBNZ Governor Graeme Wheeler tipped to keep the official cash rate on hold at 2.5 percent.
The kiwi increased to 82.43 US cents on Wednesday at 8am in Wellington from 82.29 cents the day before, following the Australian dollar's lead, which rose to US$1.0472 from US$1.0446. The kiwi was little changed at 78.68 Australian cents from 78.73 cents on Tuesday.
Bank of New Zealand (BNZ) strategist, Kymberly Martin said while the RBA’s accompanying statement highlighted the negatives, there were no new negatives so markets were happy to take no news as good news.
'If the RBNZ comes out and points to the obvious things about the economy and provides no new fears, we might have a similar reaction.'
The RBA's review comes two days before the Reserve Bank of New Zealand (RBNZ) reviews monetary policy, with RBNZ Governor Graeme Wheeler tipped to keep the official cash rate on hold at 2.5 percent.
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