Forex – New Zealand Dollar Falls as RBNZ Cuts Rates to Historic Low

© Reuters. – The New Zealand dollar fell on Wednesday in Asia after the Reserve Bank of New Zealand cut interest rates to a fresh record low.

The central bank lowered the official cash rate (OCR) to 1.5%. It also hinted of one more reduction this year.

“The Monetary Policy Committee decided a lower OCR is necessary to support the outlook for employment and inflation consistent with its policy remit,” the Reserve Bank. “A lower OCR now is most consistent with achieving our objectives and provides a more balanced outlook for interest rates.”

According to the central bank’s projection, the average OCR by the end of this year is 1.48% and 1.36% by the third quarter of 2020.

The pair fell 0.4% to 0.6575 by 11:30 PM ET (03:30 GMT). It was trading near 0.6602 immediately before the release of the statement.

The pair rose 0.1% to 0.7018. Australia’s central bank kept interest rates on hold, upending bearish speculation that it could ease policy after a weaker-than-expected inflation reading.

Meanwhile, the edged up today, recovered slightly from losses this week as traders await further news on the Sino-U.S. trade front.

The U.S. confirmed this week that it planned to raise tariffs on $200 billion of Chinese goods this Friday. Citing people familiar with the matter, Bloomberg said China is considering retaliatory tariffs on U.S. imports.

Chinese Vice Premier Liu He is travelling to Washington to resume trade negotiations with the U.S. on Thursday and Friday, according to a statement on the Chinese Ministry of Commerce website. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will attend the talks.

The pair fell 0.2% to 109.98.

The which measures the greenback against a trade-weighted basket of six major currencies fell 0.2% to 97.220.

The dollar rose earlier in the day after upbeat job data provides further evidence that the labour market remains robust.

The U.S. Labor Department’s latest Job Openings and Labor Turnover Survey report, a measure of labour demand, showed job openings in March improve to about 7.49 million from 7.14 million in February, beating expectations of 7.350 million.

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