NZ Dollar Higher After Financial Stability Report

The New Zealand dollar advanced today as a report from the Reserve Bank of New Zealand revealed that the nation’s financial system is stable and is able to withstand negative events. The currency rallied against its major peers, including the Japanese yen, which was attempting to hold ground but failed.

The RBNZ released its Financial Stability Report at the end of the previous trading session. The central bank said in the report:

The New Zealand financial system remains sound and continues to operate effectively. The banking system is well capitalised, funding and liquidity buffers are above required minima, and non-performing loans continue to decline. Stress tests of all the major banks’ portfolios undertaken over the past six months demonstrate that each bank has the capacity to manage a range of significant negative events.

RBNZ Governor Graeme Wheeler was speaking at a press-conference after the report. He complained about the strength of the currency, saying that the “exchange rate is unjustified and unsustainable”.

NZD/USD advanced from 0.7806 to 0.7857 as of 7:26 GMT today. EUR/NZD dropped from 1.5969 to 1.5890. NZD/JPY climbed from 90.38 to 90.58, trading near the highest level since October 2007, after the earlier drop to 90.23.

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