- RBNZ’s Orr says it’s too early to tell if another rate cut is needed.
- US Dollar Index clings to small gains above 97.60.
- Markets await developments surrounding the U.S.-China trade war.
After dropping to a fresh 2019 low at 0.6525 on Wednesday, the NZD/USD pair staged a late recovery to close the day with modest losses. However, the pair struggled to preserve its momentum on Thursday and was last down around 5 pips on the day at 0.6571.
Commenting on the Reserve Bank of New Zealand’s decision to cut its official cash rate to a record low of 1.5% earlier this, RBNZ Governor Adrian Orr told Radio NZ that the rate cut would put more money into the economy and added that it was too early to tell if another cut will be needed in the near-term. “Moving now is the best choice for us as far as we consider because it means we get ahead of the curve – we aren’t chasing the economy in cycles, we’re actually getting ahead and removing the cycles,” Orr explained.
On the other hand, with investors waiting for the outcome of today’s high-level trade talks between American and Chinese officials, the US Dollar Index stays in its weekly trading range above mid-97s. If today’s talks fail, we could see the kiwi come under a renewed pressure as the Trump administration’s tariff hike is likely to force China to retaliate and escalate the tension.
Today’s data from the U.S. revealed that the trade deficit rose to $50 billion in March but came in slightly better than the market expectation of $50.2 billion.
Retail sales data from New Zealand and the inflation report from the United States will be Friday’s significant macroeconomic data releases.
Technical levels to watch for
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