The 52nd Parliament in New Zealand was formally opened on Tuesday in Wellington. Today, another ceremony - the state opening of Parliament - will take place. The Governor General will attend this ceremony and deliver a Speech from the throne which sets out the Government's priorities for the term.
As promised during the election campaign, Finance Minister Grant Robertson has launched a review of the Central Bank’s mandate to include maximizing employment as a monetary policy goal. However, he said there was no plan to include the New Zealand dollar, the world’s 11th most traded currency, in the bank’s revised mandate. Mr Robertson also said he did not expect the proposed alterations to have any immediate impact on monetary policy, but acknowledged that in a situation of high unemployment and slightly higher inflation, rates could be lowered though, “My view is that this shouldn’t have a dramatic impact, certainly in the near-term”.
Whilst the FX market was busy selling Aussie Dollars over the past 18 hours, its Kiwi counterpart held pretty steady against the USD; moving only between 0.6888 and 0.6940. This combination at one point pressured the AUD/NZD cross down to 1.1057; its lowest point in almost three weeks before a very slight recovery in the last hour of NY trading. For local FX markets, however, the next key event is still Thursday’s RBNZ meeting.