The New Zealand dollar gained today with the help of positive employment report released overnight. Graeme Wheeler, Governor of the Reserve Bank of New Zealand, was speaking early during the Asian session, sending mixed signals about the future monetary policy.
New Zealand employment rose 0.9 percent in the December quarter from the previous three months after falling 0.5 percent in the September quarter. The unemployment rate sank from 6.0 percent to 5.3 percent while experts had predicted an increase to 6.1 percent.
Wheeler delivered a speech to Canterbury Employersâ Chamber of Commerce in Christchurch today. On one hand, he said that an interest rate should not be used as a measure to combat low inflation:
It would be inappropriate to attempt to offset the low oil price effect through the OCR, which tends to influence inflation outcomes over an 18 month to 2 year horizon.
On the other, he mentioned possibility of monetary easing in the future:
If concerns deepen around the prospects for the global economy and its impact on New Zealand, some further policy easing may be needed over the coming year to ensure future average inflation settles near the middle of the target range.
NZD/USD gained from 0.6512 to 0.6621 as of 14:07 GMT today. NZD/JPY rallied from 78.12 to 78.97. EUR/NZD fell from 1.6754 to 1.6544.
If you have any questions, comments or opinions regarding the New Zealand Dollar,
feel free to post them using the commentary form below.