There are no major Australian economic reports scheduled for release next week but the New Zealand dollar will be in focus with the Reserve Bank’s Quarterly monetary policy announcement on the calendar. The RBNZ is widely expected to leave rates unchanged but the recent trend of softer data suggests that the central bank could be less hawkish. When the central bank last met rather than express concern about a currency that had appreciated 4% that month versus the U.S. dollar, they sent NZD even higher by saying the “lower currency would help rebalance growth.”
Since NZD/USD rose another 3 cents and data continued to weaken. Job losses were reported in the second quarter, business activity and consumer confidence is down, while inflation, dairy and food prices declined. The only area of strength was housing and spending which seems to be holding steady. In light of all this it will be difficult for the RBNZ to maintain their positive views and to prevent NZD from slipping further versus the U.S. dollar.
Since NZD/USD rose another 3 cents and data continued to weaken. Job losses were reported in the second quarter, business activity and consumer confidence is down, while inflation, dairy and food prices declined. The only area of strength was housing and spending which seems to be holding steady. In light of all this it will be difficult for the RBNZ to maintain their positive views and to prevent NZD from slipping further versus the U.S. dollar.
