The NZD has come crashing down, in recent times, due to the RBNZ’s sudden awakening. Governor Orr completely missed the inflation boat. The realisation that recessionary economic conditions in the NZ economy, had crushed inflation, was a long time coming. The reaction was swift and dramatic. He cut interest rates by 75 basis points, before the release of the quarterly inflation report, trying to avoid his failures being recognised. This cut the legs out from the KIWI, which has crashed below 0.5900, only to regain some ground to trade around 0.6050. The RBNZ is likely to cut more and undermine support for the NZD, while interest rate differentials, will only add to downside pressures.
The current interbank midrate is: NZDUSD 0.6057
The interbank range this week has been: NZDUSD 0.6037- 0.610