Eur/Nzd is a bull

20 Feb

The Reserve Bank of New Zealand Governor Wheeler stated that the NZD is overvalued in his address to the press Today, stating that he is willing to intervene to bring NZD lower if needed. This is a surprising dovish turn from what we’ve been hearing this week. Prime Minister Keys and Finance Minister English have came on record to publicly support a stronger NZD, stating the benefits a strong NZD brings for consumers as import costs decrease. This, together from the hawkish RBNZ statement earlier this month assured traders and speculators alike that a rate cut is not even on the table for discussion. Now, Wheeler has done a 180 degrees turn around and say that he is willing to use the benchmark rate as a tool to lower NZD, essentially alluding to a rate cut down the road. Interestingly, there are unconfirmed reports that RBNZ has been participating in market intervention by selling NZD/USD above 0.845 for the past few months, so it seems that RBNZ was never truly comfortable with a high NZD, and it is only the failure of keeping NZD down that Wheeler has been forced to suggest rate cuts.

Source: fxstreet.com

eur nzd

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