For those just tuning in (maybe ya just woke up) ... a crushing of the NZD this morning!
The news is the Reserve Bank of New Zealand cut its Official Cash Rate by 25 basis points
- From 3.5% to 3.25%
- And they foreshadowed another cut this year
All the headlines, to read all about it:
- RBNZ monetary policy announcement: CUTS RATES
- Forex technical analysis: NZDUSD heads lower after surprise cut
- RBNZ's Wheeler: Believes NZD has significant way to fall still
- RBNZ Governor Wheeler still going
In their own words, and briefly, cutting through all the verbiage.
The positives in NZ:
The New Zealand economy is growing at an annual rate around three percent, supported by low interest rates, high net migration and construction activity, and the decline in fuel prices
And, the negatives:
However, the fall in export commodity prices that began in mid-2014 is proving more pronounced. The weaker prospects for dairy prices and the recent rises in petrol prices will slow income and demand growth and increase the risk that the return of inflation to the mid-point would be delayed.
Clearly, the negatives won the day for the RBNZ (actually for Wheeler ... the RBNZ is quite unusual, the decision is solely the governor's. Maybe that's why the RBNZ is so decisive and get the job done. That and a supportive government.):
A reduction in the OCR is appropriate given low inflationary pressures and the expected weakening in demand, and to ensure that medium term inflation converges towards the middle of the target range
