The New Zealand dollar dropped today as economic data released from New Zealand over the trading session was not particularly good, leading to speculations that the nation’s central bank may be forced to cut interest rates.
Retail sales rose 1.2 percent in the December quarter of the previous year, failing to meet market expectations of a 1.4 percent increase. The Reserve Bank of New Zealand lowered its 2-year inflation expectations from 1.9 percent to 1.6 percent. While the RBNZ was showing willingness to stay passive, refraining from monetary easing as it is trying to assess the impact of already extremely expansionary policy on the nation’s economy, poor economic data may prompt the central bank to act sooner rather than later.
NZD/USD dropped from 0.6646 to 0.6598 as of 11:29 GMT today. NZD/JPY slid 1.3 percent from 76.14 to 75.12.
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