Forex: Kiwi Soars to Highest Level since April, RBNZ's Spencer Comments
- Kiwi Reaches Multi-Week Highs Against All of Its Major Peers
- RBNZ’s Spencer’s Speech in Hong Kong Boosts NZD/USD to Multi-Month Highs
- Next RBNZ Decision is April 23, 2014
The New Zealand Dollar outperformed its major peers in otherwise quiet overnight trade session. Reserve Bank New Zealand (RBNZ) Deputy Governor Spencer spoke on Macro-prudential policy and his comments appeared to have catalyzed many of the kiwi crosses to multi-week and -month highs.
RBNZ Spencer said in a speech given in Hong Kong that the monetary policy tightening cycle “might have needed to be more accentuated” had the limits on low-deposit home loans not been in place. He goes on to say that the limits will be removed once housing market pressures have moderated. He also says in his speech that the Christchurch rebuild is adding to inflationary risk, but the increase in rates will damp house price inflation. He notes that many New Zealand exporters have adjusted to the highKiwi Dollar exchange rate. Finally, he says that RBNZ is happy with the current policy framework. RBNZ hiked rates for the first time in 3-years on March 12, 2014. DailyFX Chief Strategist John Kicklighter says that New Zealand Dollar’s next bull leg will be held up by market rates.
The Kiwi Dollar has extended gains against the US Dollar and covered much ground since the RBNZ hiked rates for the first time. Yet, DailyFX Technical Strategist Jamie Saettele, CMT, notes from a technical perspective that the NZD/USD is coming into a lot of overhead on a long-term perspective.
DailyFX Market Analyst, David DeFerranti mentioned that lacking any bearish signals the NZD/USD could extend gains beyond April 2013’s high. At the time this report was written the NZD/USD broke above the April 2013 high reaching the highest level in 11-months.
Weekly Chart – Created Using FXCM Marketscope 2.0
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-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to firstname.lastname@example.org.
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