The US Treasury announcement of its borrowing plans ahead shoved the US dollar lower and gave upward impetus to 'risk' pretty much across the board:
- Treasury Q1 quarterly refunding estimate $760 vs $816 billion prior
- US dollar falls after the Treasury reveals a healthier balance sheet
- The treasury borrowing announcment kickstarts stock and bond buying/dollar moves lower
NZD/USD rose alongside much of FX vs. the USD. What may have been lost in the mix was a speech almost around the same time from Reserve Bank of New Zealand Chief Economist Paul Conway in which he was quite explicit that the inflation fight in NZ is not over:
“Recent economic data suggest that monetary policy is working, with the economy slowing and inflation easing. But we still have a way to go to get inflation back to the target midpoint of 2%”
The 'recent data' Conway refers to includes measures of core inflation having fallen, but annual non-tradable inflation was higher than the RBNZ estimated. This was seen in the data last week:
The implication for monetary policy is that rate cuts from the RBNZ remain many months away. ANZ are tipping the first cut in August and after this speech still are.
