NZD/USD bears taking control after RBNZ dovish statement

By FXStreet FXStreet (Guatemala) – NZD/USD has continued to drop post the RBNZ and has made fresh lows as we get going in Asia.

NZD/USD dropped 70 pips on the immediate release of the dovish statement after the Central Bank cuts rates by 25bp’s for a third time this year. The next quarter may be a tough one for the economy with poor weather conditions, business conditions and continued lackluster performances in the economy on the back of China’s slowdown and commodity prices.

The RBNZ will also continue to monitor the Chinese Yuan and Auckland’s housing sector very closely while it is too early to know if the market there is cooling. At the same time, the Bank will leave the door open for further, but substantial, rate cuts depending on data. The bird is sighted to weaken further as well and ‘appropriately’ so. The OCR now stands at 2.75% from 3.00% previous.

The RBNZ statement, coupled with a poor performance on Wall Street, leaves the NZD/USD under pressure leading into the Tokyo open. The Nikkei opened -1.9%.

The S&P 500 finished up -1.4% and futures are down 1.27% in early Asia on the back of the sell-off on mounting fears that …read more

Source:: FX Street