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☆ Dollar mired near two-month low; Kiwi gains on RBNZ surprise
▼ + stars: | 2023-04-05 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

The kiwi rallied 1% to touch a two-month high of $0.6383 after the decision. The dollar index , which measures the currency against six peers, eased to a fresh two-month low of 101.43, after dropping 0.5% overnight. Markets were pricing in a 43% chance of Fed not raising interest rates a day earlier. "And the Fed may have to perhaps do more and keep rates high for longer." The yield on 10-year Treasury notes was up 1.3 basis points to 3.350%, having slipped 9 basis points overnight.

☆ New Zealand central bank unexpectedly hikes rates 50 basis points, kiwi rallies
▼ + stars: | 2023-04-05 | by ( Lucy Craymer | ) www.reuters.com time to read: +2 min

Twenty-two of 24 economists in a Reuters poll had forecast the Reserve Bank of New Zealand (RBNZ) would raise rates by just 25 basis points. This is the eleventh straight hike since the central bank started raising rates in October 2021. It now expects the cash rate to peak at 5.5%. The RBNZ's move was in contrast to Australia's central bank, which kept rates on hold at its review on Tuesday. The central bank noted that while the level of economic activity over the fourth quarter was lower than anticipated and there were emerging signs of capacity pressures easing, demand continues to significantly outpace supply capacity.

☆ Dollar struggles on weak data; Kiwi surges on RBNZ surprise
▼ + stars: | 2023-04-05 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

The kiwi rallied 1% to touch a two-month high of $0.6383 after the decision. Elsewhere, data overnight showed U.S. job openings dropped to their lowest level in nearly two years in February, suggesting that labour market conditions were finally easing. The dollar index , which measures the currency against six peers, eased to a fresh two-month low of 101.43, after dropping 0.5% overnight. In the U.S. bond market, the two-year Treasury yield, which typically moves in step with interest rate expectations, was up 2.6 basis points at 3.860%, after sliding 14 basis points on Tuesday. The yield on 10-year Treasury notes was up 1.8 basis points to 3.355%, having slipped 9 basis points overnight.

☆ New Zealand central bank surprises with 50 basis point hike, kiwi soars
▼ + stars: | 2023-04-05 | by ( Lucy Craymer | ) www.reuters.com time to read: +1 min

WELLINGTON, April 5 (Reuters) - New Zealand's central bank unexpectedly raised its cash rate by 50 basis points to a more than 14-year high of 5.25% on Wednesday, reiterating that inflation was still too high and persistent. Twenty-two of 24 economists in a Reuters poll had forecast the Reserve Bank of New Zealand (RBNZ) would raise rates by just 25 basis points. This is the eleventh straight hike since the central bank started raising rates in October 2021. At the RBNZ's review in February, when it raised rates by 50 bps, it had signalled a 50 bp hike for April but with the outlook turning darker, economists had forecast a smaller increase. The central bank noted that while the level of economic activity over the fourth quarter was lower than anticipated and there were emerging signs of capacity pressures easing, demand continues to significantly outpace supply capacity.

☆ Stocks struggle as US jobs dry up, kiwi leaps on RBNZ surprise
▼ + stars: | 2023-04-05 | by ( Tom Westbrook | ) www.reuters.com time to read: +4 min

Two-year treasury yields , which closely track short-term rate expectations, dived almost 15 basis points and the dollar tracked the move to hit two-month troughs. U.S. interest rate futures have rallied strongly over the last few weeks, as traders figure that under pressure banks will tighten up on lending anyway and save the need for monetary policymakers to do the job. DOLLAR SQUEEZEDOutside the United States, markets see other central banks staying the course on hikes to tame inflation. Elsewhere investors see a few more rate hikes in store in Europe, where German exports have turned surprisingly strong. Commodity markets are settling after Monday's surge in oil prices on news of surprise OPEC+ production cuts.

☆ Dollar struggles near 2-month low on weak data, focus on RBNZ
▼ + stars: | 2023-04-05 | by ( ) www.cnbc.com time to read: +3 min

The U.S. dollar was stuck near two-month lows on Wednesday as weak economic data bolstered views that the Federal Reserve is near the end of its monetary tightening cycle. The kiwi rose 0.08% to $0.632 ahead of a policy decision from Reserve Bank New Zealand later in the day. The central bank is expected to slow the pace of monetary tightening, raising rates by just 25 basis points. In the U.S. bond market, the two-year Treasury yield , which typically moves in step with interest rate expectations, was up 1.4 basis points at 3.848%, after sliding 14 basis points on Tuesday. The yield on 10-year Treasury notes was up 1.1 basis points to 3.348%, having slipped 9 basis points overnight.

☆ Central banks stick to rate hikes with eye on market turmoil
▼ + stars: | 2023-03-23 | by ( ) www.reuters.com time to read: +5 min

Overall, 10 developed economies have raised rates by a combined 3,290 basis points (bp) in this cycle to date. Reuters Graphics1) UNITED STATESThe Fed raised rates by a quarter point on Wednesday, continuing its most aggressive series of hikes since the 1980s. After setting its policy rate to 4.75%-5.00%, the Fed hinted it may soon pause rate rises. Reuters Graphics3) CANADAThe Bank of Canada on March 8 became the first major central bank to halt monetary tightening during this cycle. Reuters Graphics5) AUSTRALIAAustralia's central bank raised its key rate by a quarter point to 3.6% in March, the highest since May 2012, but hinted rate hikes may be over for now.

☆ NZ banks operating above minimum regulatory requirements -central bank
▼ + stars: | 2023-03-17 | by ( ) www.reuters.com time to read: +1 min

March 17 (Reuters) - New Zealand's central bank said on Friday all banks in the country were currently operating above its minimum regulatory requirements and that it was closely monitoring the turmoil in global financial markets. "Our rigorous stress testing has shown that they are well-placed to deal with far more adverse situations than what we are currently experiencing." Banking stocks globally have been battered since the collapse of Silicon Valley Bank. On Thursday, Credit Suisse (CSGN.S) said it will borrow up to $54 billion from Switzerland's central bank to shore up liquidity. Reporting by Renju Jose in Sydney; Editing by Alasdair Pal and Christopher CushingOur Standards: The Thomson Reuters Trust Principles.

☆ New Zealand's economy shrinks in fourth quarter, changing rate outlook
▼ + stars: | 2023-03-16 | by ( ) www.cnbc.com time to read: +1 min

Pedestrian walking past the Reserve Bank of New Zealand building on Saturday, June 22, 2019. New Zealand's economy missed forecasts for growth in the fourth quarter and instead shrank 0.6%, official data showed on Thursday, raising the chances of a recession and making further interest rate hikes less likely. Gross domestic product failed to meet analysts' expectations of a 0.2% contraction in the December quarter and was well below the Reserve Bank of New Zealand's forecast of 0.7% growth. The central bank and treasury had both forecast the country would enter a shallow recession in the second quarter of 2023. Regardless of whether the country is entering a recession, the economy is much less overheated than the Reserve Bank of New Zealand, or RBNZ, had expected.

☆ ECB goes big on rates but bank turmoil clouds central banks' outlook
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +5 min

Overall, 10 big developed economies have raised rates by a combined 3,165 basis points (bps) in this cycle to date. Reuters Graphics3) CANADAThe Bank of Canada on March 8 became the first major central bank to halt monetary tightening during this cycle. Reuters Graphics6) NORWAYNorway's central bank meets next week and is expected to raise rates by 25 bps to contain above-target inflation. Reuters Graphics10) JAPANThe Bank of Japan, the most dovish major global central bank, maintained ultra-low interest rates at its March meeting, the final one for retiring BOJ governor Haruhiko Kuroda. The BOJ resisted changing its controversial yield curve control policy, which it uses to cap interest rates on longer-term debt.

☆ New Zealand hikes rates to over 14-year highs, flags more to come
▼ + stars: | 2023-02-22 | by ( ) www.cnbc.com time to read: +1 min

New Zealand's central bank raised interest rates by 50 basis points to a more than 14-year high of 4.75% on Wednesday, and said it expects to keep tightening further as inflation remains too high, a hawkish signal that sent the local dollar surging. The RBNZ continues to expect the official cash rate (OCR) to peak at 5.5% in 2023, according to the monetary policy statement accompanying the rate decision. That would mark the most aggressive policy tightening streak since the official cash rate was introduced in 1999. "While there are early signs of price pressure easing, core consumer price inflation remains too high, employment is still beyond its maximum sustainable level, and near-term inflation expectations remain elevated," the central bank said in a statement. The decision was largely in line with a Reuters poll.

☆ NZ cenbank hikes 50bps, flags more to come as inflation 'too high'; kiwi gains
▼ + stars: | 2023-02-22 | by ( Lucy Craymer | ) www.reuters.com time to read: +3 min

The RBNZ continues to expect the cash rate to peak at 5.5% in 2023, according to the monetary policy statement (MPS) accompanying the rate decision. That would mark the most aggressive policy tightening streak since the official cash rate was introduced in 1999. "While there are early signs of price pressure easing, core consumer price inflation remains too high, employment is still beyond its maximum sustainable level, and near-term inflation expectations remain elevated," the central bank said in a statement. The New Zealand dollar rose as high as $0.6246 after the decision, reflecting the hawkish tone of the statement, having traded as low as $0.6206 earlier. New Zealand's annual inflation is currently running near three-decade highs of 7.2%, well above the central bank's medium term target of 1%-3%.

☆ Dollar, sterling underpinned by upbeat PMI surveys; kiwi jumps
▼ + stars: | 2023-02-22 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

The dollar rose against most major currencies after the upbeat data save for sterling , which jumped 0.6% on Tuesday. The euro , however, failed to benefit from the data as it slid 0.36% in the previous session. Against the Japanese yen , the dollar rose to a two-month high of 135.23 in the previous session, and slipped marginally to 134.91 in early Asia trade on Wednesday. The two-year yields jumped to an over three-month high of 4.738% in the previous session, and last stood at 4.6933%. The kiwi rose 0.39% to $0.6238, after earlier jumping roughly 0.5% to an intra-day high of $0.6248 immediately after the RBNZ's cash rate decision.

☆ Dollar edges lower from six-week peak, Swedish crown jumps
▼ + stars: | 2023-02-20 | by ( Samuel Indyk | ) www.reuters.com time to read: +3 min

The U.S. dollar index , which measures the dollar against six other major currencies, slipped 0.1% to 103.91. Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled interest rates would need to rise to quash inflation. The euro fell 1.1% against the Swedish crown to 11.059 crowns while the dollar was down 0.8% to 10.3604. The euro was little changed against the dollar at $1.0687, just above Friday's six-week low of $1.06125. "Euro rates are probably likely to stay at higher levels, whereas we think dollar rates will more easily turn lower," Turner added, which he said could support the euro in the first half of the year.

It hit a six-week high of 104.67 on Friday. Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled interest rates would need to go higher in order to successfully quash inflation. The RBNZ is expected to scale down its tightening campaign only slightly, with a half-point interest rate increase to 4.75%. "With inflation so high ... not staying the course could mean even higher interest rates are required down the track," said analysts at ANZ. The offshore yuan was last marginally higher at 6.8643 per dollar, while the onshore yuan last bought 6.8580 per dollar.

☆ Dollar steady as robust U.S. data keep Fed hawks in control
▼ + stars: | 2023-02-20 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled interest rates would need to go higher in order to successfully quash inflation. The kiwi fell 0.07% to $0.6238, with eyes on the Reserve Bank of New Zealand's (RBNZ) interest rate decision on Wednesday. The RBNZ is expected to scale down its tightening campaign only slightly, with a half-point interest rate hike to 4.75%. "With inflation so high ... not staying the course could mean even higher interest rates are required down the track," said analysts at ANZ. The offshore yuan was last marginally lower at 6.8741 per dollar, while the onshore yuan last bought 6.8657 per dollar.

☆ Dollar buoyant as robust U.S. data keep Fed hawks in control
▼ + stars: | 2023-02-20 | by ( Rae Wee | ) www.reuters.com time to read: +3 min

"For the week ahead, the dollar can track higher given the recent run of economic data which supports the narrative of higher-for-longer interest rates," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (CBA). Hawkish comments from Fed officials have also underpinned the U.S. dollar, as they signalled that interest rates will need to go higher in order to successfully quash inflation. The kiwi slipped 0.17% to $0.6232, with eyes on the Reserve Bank of New Zealand's (RBNZ) interest rate decision on Wednesday. The RBNZ is expected to scale down its tightening campaign only slightly, with a half-point interest rate hike to 4.75%. "With inflation so high ... not staying the course could mean even higher interest rates are required down the track," said analysts at ANZ.

☆ Disasters lower outlook for New Zealand interest rate rise
▼ + stars: | 2023-02-20 | by ( Lucy Craymer | ) www.reuters.com time to read: +3 min

Then on Feb. 12 to 15 a cyclone hit the North Island, which includes Auckland. When Cyclone Gabrielle hit, picking had just begun on pip-fruit farms, whose production is worth about NZ$1 billion a year. That would normally be a reason for a central bank to lift interest rates further, but some economists expect the RBNZ to look past the sudden rise as being temporary. Still, Kiwibank chief economist Jarrod Kerr said the central bank should pause hikes until the effect of the cyclone can be understood. After the Christchurch earthquake, the central bank cut its policy rate due to concerns about the economy.

☆ RBNZ to hike rates 50bps on Feb. 22, another 50bps due by mid-year
▼ + stars: | 2023-02-16 | by ( Devayani Sathyan | ) www.reuters.com time to read: +4 min

The RBNZ has already raised rates by a total of 400 basis points since October 2021. The remaining five economists expected a second successive 75-basis point move at the Feb. 22 policy meeting. But nearly half of respondents, 45%, predicted a lower peak rate. Inflation was expected to fall to 5.1% this year and 2.6% in 2024, a Reuters poll showed last month. A recent RBNZ survey expected price pressures to slow to 3.30% in the next two years.

☆ Central banks hike rates again, but a pause is coming
▼ + stars: | 2023-02-02 | by ( ) www.reuters.com time to read: +5 min

REUTERS/Joshua RobertsLONDON, Feb 2 (Reuters) - Major central banks are steadily moving closer to a pause in their aggressive interest rate hiking campaigns. The European Central Bank and the Bank of England raised rates on Thursday, but markets suspect a peak is nearing. Overall, 10 big developed economies have raised rates by a combined 2,965 basis points in this cycle to date, with Japan the holdout dove. Canada's central bank has raised its policy rate at a record pace of 425 basis points in 10 months. The central bank raised its forecast for its peak interest rate to 5.5%, up from a previous forecast of 4.1%.

☆ The mouse that roared: New Zealand and the world's 2% inflation target
▼ + stars: | 2023-01-30 | by ( Lucy Craymer | ) www.reuters.com time to read: +5 min

Since it's arrival in 1990, the 2% inflation target phenomenon has sailed from Wellington around the globe to become the accepted norm among central banks, large and small, for grounding public expectations for what inflation ought to be. The adoption of the inflation target was followed by aggressive monetary tightening, with 90-day rates climbing to 15% in 1990. A year later, inflation had fallen to 2% and New Zealanders' inflation expectations adjusted quickly to the new paradigm. Initially there was debate about whether interest rates or money supply should be the target, but it was decided it was better to target the ultimate goal: inflation. "They did all the hard work and I just got all the glory and the title of being the most despised man in New Zealand," Douglas said.

☆ Take Five: Staring at the ceiling
▼ + stars: | 2023-01-23 | by ( ) www.reuters.com time to read: +5 min

All told, companies worth more than half the S&P 500's market value are reporting results over the next two weeks. Stock markets can predict the global PMI levels, tending to bounce ahead of a sustainable rise of the index. On Wednesday, watch out for Australian and New Zealand inflation data as well, with the RBNZ pondering how much more to tighten, and the RBA wondering whether it's time to pause. Reuters Graphics5/LONDON CALLINGLondon's bluechip FTSE 100 index (.FTSE) is poised to launch a new attempt to scale an all-time high in days to come. British public sector borrowing numbers, producer price inflation and PMI data are all due as well ahead of a Bank of England meeting the following week.

☆ Central banks ramp up rates again but the pace slows
▼ + stars: | 2022-12-15 | by ( ) www.reuters.com time to read: +5 min

LONDON, Dec 15 (Reuters) - Central banks in Britain, Norway, Switzerland, the euro zone and the United States have all raised interest rates this week. The central bank raised its forecast for its peak interest rate to 5.5%, up from a previous forecast of 4.1%. Money markets moved after the statement to forecast UK interest rates will top out at around 4.5% in August. Markets anticipate an 80% chance of a 50 bps hike when the Riksbank meets next in February. But market players do not expect any significant change from the world's lone major central bank dove.

☆ NZ faces 'shallow' recession as rates need to rise more - senior central banker
▼ + stars: | 2022-11-28 | by ( Stella Qiu | ) www.reuters.com time to read: +3 min

SYDNEY, Nov 28 (Reuters) - New Zealand is likely facing a "shallow" recession as interest rates need to rise further to tame inflation, a top central banker said on Monday, suggesting that a pause in the policy tightening streak was still a distant prospect. The recession during the global financial crisis lasted six quarters and led to a total fall in GDP of around 4 percentage points. Silk said higher rates were justified by rising inflation expectations in New Zealand and the strength of the labour market which is driving wages higher. "If you look at some of the peak indicators of peak rates, for the Fed for example, that's very similar to our latest OCR track as well. Fed members have generally projected rates could rise as far as 5.0 to 5.25%, with some even expecting a higher peak.

☆ We are unambiguously contractionary in our monetary position, says RBNZ
▼ + stars: | 2022-11-24 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailWe are unambiguously contractionary in our monetary position, says RBNZAdrian Orr of Reserve Bank of New Zealand discusses its biggest-ever rate hike of 75 basis points.

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