New Zealand Dollar News
This evening at 5pm EST, the Reserve Bank of New Zealand (RBNZ) will release the Cash Rate decision.
Since March of 2011, the release has been consistently 2.50%. The RBNZ Governor decides the rate once he consults with senior bank staff and external advisers. The rate is expected to stay the same but if there were to be a deviation, severe volatility would be likely.
Also being released is the Rate Statement which carries a lot of weight for the New Zealand Dollar. The RBNZ uses it to communicate their Monetary Policy and economic outlook.
This week has been bearish so far for the NZD/USD but this evening’s Rate Statement could be a strong determining factor of this pair’s direction for the rest of the week.
United States Dollar
Today, we have seen some serious dollar weakness. At 350K, New Home Sales were 22K less than the forecasted 372K.
This negative deviation plus the testimony of the Treasury Secretary today resulted in a bearish USD against many major currencies.
One quote from Treasury Secretary Tim Geithner as he testified before the House Committee today, was: “The Council’s report identifies a number of potential threats to the stability of the financial system. Among the most important of these is the fact that the financial system still confronts a challenging and uncertain overall economic environment.”
Yesterday, I wrote concerning the Euro and and German IFO, the release was forecasted to be 104.8 which would’ve been the lowest since 2010. It turned out to be even lower hitting 103.3, a 28 month low.
“It looks as if German businesses have finally woken up to reality. Today’s Ifo index sends a clear warning that even the most solid ship can capsize in a rough thunderstorm,” stated ING economist Carsten Brzeski.
With Germany being Europe’s largest economy, this just adds to the bad news for the euro’s outlook.
Written By: Tony College
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