Forex: NZD/USD firms on RBNZ interest rate statement

Written by: Violina Todorova
July 25, 2013

_iNVEZZ.com Thursday July 25th:_ The kiwi has remained staunch against the greenback in today’s Asian session, with the pair breaking back through the 0.80 barrier to a current intraday high at 0.8006, following the latest interest rate decision of the Reserve Bank of New Zealand, announced at 22:00 BST yesterday.

The RBNZ has held its official cash rate (OCR) at 2.50 percent and in a statement in Wellington today governor Graeme Wheeler said: “Although removal of monetary stimulus will likely be needed in the future, we expect to keep the OCR unchanged through the end of the year. The extent of the monetary policy response will depend largely on the degree to which the growing momentum in the housing market and construction sector spills over into inflation pressures.”

Future adjustments to the benchmark interest rate will, according to Governor Wheeler, depend on the impact of a still-buoyant housing market on price inflation. He reiterated that the RBNZ will keep borrowing costs at a record low this year, with any increases in the OCR not happening before January next.
Yesterday the greenback took sustenance from the strong US New Homes Sales data for June m/m, which came out as 497,000, well up on expectations for 482,000 and above the prior month’s 459,000, revised down from 476,000.
Traders will today be focusing on the US Durable Goods Orders data for June, due to be released at 13:30 BST.

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