NZD/USD at 0.7790 as RBNZ Signals Rate Pause

New Zealand’s central bank signaled it will keep interest rates on hold for an extended period as inflation slows and the currency remains unjustifiably high.

“A period of assessment remains appropriate before considering further policy adjustment,” Reserve Bank of New Zealand Governor Graeme Wheeler said in Wellington after keeping the official cash rate at 3.5 percent. He omitted a comment from his prior statement that the central bank expected some further policy tightening would be necessary to contain future inflation.

The currency fell as traders priced in a 94 percent chance that rates wouldn’t change between now and June. Wheeler has scope to extend a rate pause after inflation slowed more than expected in the third quarter to the bottom of the 1 percent-to-3 percent range the central bank targets.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.