Let’s have a quick look at the forex market today….
New Zealand’s central bank kept interest rates at a record low of 1.75 percent today. The Central Bank said increased downside risks to its outlook meant the next move in rates was now more likely to be a cut, knocking the currency to a two-week low.
While steady rates were expected, the shift in bias to explicitly favour a rate cut as a next move was a shock to markets. In a statement, the RBNZ said that they would keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.
The US dollar however held modest gains as a recovery in investor risk appetite arrested a decline in benchmark U.S. Treasury yields, which fell to 15-month lows this week.