The New Zealand dollar has fallen to a seven-month low against the US Dollar, following the Reserve Bank’s decision to keep the cost of borrowing on hold.
The kiwi fell from 82.2 US cents to as low as 81.40 cents, – the lowest it has been since the 4 February.
governor Graeme Wheeler kept the benchmark interest rate on hold as expected, while pulling back expectations for inflation and the forecast track for the 90-day bank bill rate, seen a proxy for the official cash rate..
The outlook for prices of New Zealand’s main commodities will also be closely watched by currency strategists, A stronger US dollar also weighed on the kiwi, as investors speculate strength in the US economy may prompt a more hawkish statement from the Federal Reserve next week.
Traders are looking ahead to next week’s Fed meeting and all eyes will be on any clues with regards to the timing of an interest rate increase. The Fed is on track to end its monthly bond-buying program, currently at
US$25 billion, in October.
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