25 Feb 2015
RBNZ Wheeler takes the spotlight
FXStreet (Bali) - RBNZ Governor Wheeler is appearing before the Finance Select Committee at NZ's parliament.
The NZD/USD trade just below the 0.75 line, lost during last Asian session after an overdone reaction to RBNZ survey of inflation expectations, which while downbeat - 1.8% in Q1 2015 vs 2.06% in Q4 2014 - it only reflects the view of businesses and professionals, and not the Central Bank's core thinking.
While it was argued that the depressed levels of inflation expectations via the survey may open the doors for lower RBNZ rates, the data should be taken with a grain of salt, as the survey only comprises a sample of 750 people interviewed.
Today's RBNZ Governor comments are the ones that should be taken with enough substance to cause a more long-lasting change of sentiment towards the NZ Dollar. Wheeler is likely to make further references to the high and over-valued NZD, while any hints on future monetary policy actions will also inject decent volatility on the Kiwi Dollar.
It is worth noting though that last time Wheeler gave a speech on Feb 4 to the Canterbury Employers' Chamber of Commerce in Christchurch, the outcome was perceived as neutral on monetary-policy stance. Wheeler noted, "In the current circumstances, the Bank expects to keep the Official Cash Rate (OCR) on hold for some time, and that future interest rate adjustments, either up or down, will depend on the emerging flow of economic data."
Wheeler also said that the New Zealand dollar is still "unjustified" in terms of current economic conditions, and "unsustainable" in terms of long-term economic fundamentals. "We expect to see a further significant depreciation" Wheeler added.
The NZD/USD trade just below the 0.75 line, lost during last Asian session after an overdone reaction to RBNZ survey of inflation expectations, which while downbeat - 1.8% in Q1 2015 vs 2.06% in Q4 2014 - it only reflects the view of businesses and professionals, and not the Central Bank's core thinking.
While it was argued that the depressed levels of inflation expectations via the survey may open the doors for lower RBNZ rates, the data should be taken with a grain of salt, as the survey only comprises a sample of 750 people interviewed.
Today's RBNZ Governor comments are the ones that should be taken with enough substance to cause a more long-lasting change of sentiment towards the NZ Dollar. Wheeler is likely to make further references to the high and over-valued NZD, while any hints on future monetary policy actions will also inject decent volatility on the Kiwi Dollar.
It is worth noting though that last time Wheeler gave a speech on Feb 4 to the Canterbury Employers' Chamber of Commerce in Christchurch, the outcome was perceived as neutral on monetary-policy stance. Wheeler noted, "In the current circumstances, the Bank expects to keep the Official Cash Rate (OCR) on hold for some time, and that future interest rate adjustments, either up or down, will depend on the emerging flow of economic data."
Wheeler also said that the New Zealand dollar is still "unjustified" in terms of current economic conditions, and "unsustainable" in terms of long-term economic fundamentals. "We expect to see a further significant depreciation" Wheeler added.