Kiwi falls amidst talks of possible negative rates by the RBNZ
Monday 19 October, 2020
Daily Currency UpdateThe NZD fell throughout the week with comments from the Reserve Bank of New Zealand floating the idea of negative interests rates in early 2021. Comments by Assistant Governor Hawkesby suggest that the bank will deploy more unconventional tools to generate a stronger recovery.
Over the weekend, Jacinda Ardern led the Labour party to victory for New Zealand’s 53rd Parliament gaining a majority of 64 out of 120 seats in a landslide victory, and able to reform the Sixth Labour Government for a second term without any support from the other parties.
The Kiwi opened at 0.6607 against the USD this morning.
Key MoversUS retail sales came back much stronger than expected with the change of the total value of sales at the retail level coming in at 1.9% for the month, compared to forecasts of 0.7%. While this is a sign that the US economy’s driver remains healthy, there are many that believe this optimism may be short lived.
We can also expect to see some major movement in the USD as Federal Reserve Chair Powell is scheduled to speak late on Monday night. As head of the central bank which controls short term interest rates, he has more influence over the nation’s currency value than any other person. He is expected to participate in a panel discussion about cross-border payments and digital currencies.
Over in China, their National Bureau of Statistics will release their quarterly GDP data just after midday. This shows the change in the inflation-adjusted value of all goods and services produced by the economy, and is the broadest measure of economic activity and health.
- NZD/AUD: 0.9265 - 0.9430 ▲
- NZD/CAD: 0.8615 - 0.8795 ▼
- NZD/EUR: 0.5540 - 0.5715 ▼
- GBP/NZD: 1.9175 - 1.9840 ▼
- NZD/USD: 0.6520 - 0.6715 ▼