The New Zealand Dollar, known familiarly as the Kiwi, fell 1% in today’s trading session as investors wait to learn of the central bank’s decision on additional easing. The Reserve Bank of New Zealand holds its final meeting of the year on Wednesday, and on the table is the possibility of another interest rate cut. The latest poll shows economists are forecasting a 25 basis points reduction in the RBNZ lending rate. Analysts point out, however, that markets have not yet fully priced in that potential rate cut.
As reported at 11:07 am (GMT) in London, the NZD/USD was trading at $0.6673, down 1.07% and just off the session low of $0.6660. The NZD/JPY is also lower at 0.7653 Yen, down 0.92%; the pair ranged from 82.2177 Yen to 82.9650 Yen. The AUD/NZD was higher at N$1.0937, a gain of 0.37%. Meanwhile, the AUD/USD was down 0.48% to trade at $0.7301.
Dollar Policy Divergence Drives Direction
The US Dollar has continued to recover even more ground following last week’s release of robust jobs data. Analysts say that given the Fed’s mandate of full employment, the Fed has a green light for an interest rate hike this month. The next Federal Reserve meeting will be held on December 16th. The EUR/USD was trading lower at $1.0815, down 0.63%. Analysts say that the divergence in monetary policies is continuing to drive the pair toward parity.