‘No More Cuts Needed’: RBNZ Helps Kiwi Jump
Rowan Crosby • 1 min read
The Kiwi has sprung back to life this morning thanks to the RBNZ coming out and saying they might not need further cuts.
The comments were in reference to the fact that the RBNZ slashed rates by a massive 50bp last time they met. Today Governor Orr was speaking on Bloomberg and mentioned that the moves could be enough to spark the economy back into action, reducing the need for further action down the track.
The headlines have got some traction and the NZD/USD has jumped higher and is currently up around 0.38% on the session.
The Kiwi had been on the verge of breaking out to the downside overnight as it had taken out the recent lows and was looking very very weak.
But things are looking very bullish at the moment. We also saw some OK retail sales figures which came in marginally above expectations.
The interview is coming from Jackson Hole ahead of the massive event that we have that gets underway officially today with the Fed’s Powell being the number on event in town at the moment.
Some of the other key pints Orr has made in the interview are:
- We will do whatever it takes to support the NZ economy
- We can afford to wait, watch and observe what’s happening
- inflation expectations is an important signal to watch
Looking at the chart of the Kiwi, the 0.6400 will be very interesting today. If that can hold, then this might be an OK short opportunity. With support turned resistance at this level.
These types of comments can sometimes grow legs here and with the USD being a massive focus today, I suggest treading with caution prior to hearing from Powell.