Among the currencies from developed economies, the Kiwi Dollar took the largest fall in Thursday European trading after the Reserve Bank of New Zealand said last yesterday that a tighter monetary policy was likely not going to occur for at least two years. They also kept interest rates at the current 1.75%, which is still among the highest for developed economies. Analysts say that the RBNZ’s dovish stance caught markets relatively flat-footed though the status quo on the lending rate was as expected; markets were generally expected a rate hike in the not too distant future.
As reported at 10:27 am (GMT) in London, the NZD/USD was trading lower at $0.7221, down 0.44%; the pair has ranged from a session trough of $0.7192 to a peak of $0.7265 in today’s trading session. The AUD/NZD was higher at N$1.0602, a gain of 0.60%. The EUR/NZD was also higher at N$1.4817, up 0.42%.
Euro Pressured by Political Risks
The EUR is also being kept under pressure, largely as a result of political risks from the upcoming election in France. In April, the first round of presidential elections will take place with Marine Le Pen, a far-righter leader, facing off against Emmanuel Macron, a centrist. Polls thus far are mixed and show no clear-cut winner. Francois Fillon, who looked to be the likely winner as recently as two weeks ago, has been damaged by a scandal and is likely to fall in the first round of voting. The EUR/USD is currently trading nearly flat at $1.0700.