The New Zealand dollar ended the week with losses but they were not as big as might have been if the reaction to the central bank’s policy decision was less positive. Yet the reaction was positive, negating the big chunk of the kiwi’s decline.
At the start of the week, forecasters were quite bearish on the New Zealand currency, particularly because they expected an interest rate cut from the nation’s central bank. Indeed, the Reserve Bank of New Zealand did lower its key rate, yet the announcement resulted in a rally of the kiwi. The reason for such reaction was the fact that the RBNZ hinted at an end (or at least a pause) of the current easing cycle. Ultimately though, the rally did not break the downside momentum completely, trimming earlier losses but not erasing them completely.
The RBNZ was not the only major central bank to hold policy meeting this week. The Bank of England and the Swiss National Bank also held meetings, though they did not change their policies.
NZD/USD was down from 0.6738 to 0.6566 during the week but bounced to 0.6712 over the weekend. EUR/NZD rose from 1.6116 to 1.6734 before settling at 1.6364. NZD/JPY declined from 83.00 to 81.12, touching the weekly low of 79.59.
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