The New Zealand dollar continued to be weaker against the other major currencies in the Asian session on Tuesday, as speculation that the Reserve Bank of New Zealand is likely to cut its key interest rate as early as next month gained ground.
ANZ Bank New Zealand Ltd. and First NZ Capital Ltd. has joined five other banks on Monday in forecasting that RBNZ is likely to cut its Official Cash Rate at the upcoming meetings scheduled for both June and July. Some forecast about 50 basis points of cuts over the coming months from 3.5 percent.
The next RBNZ monetary policy meeting is due on June 11.
Meanwhile, the bank signaled at the April meeting that interest rate hikes were off the table. Also, it will observe conditions that could prompt a rate cut.
Traders await the Reserve Bank’s six-monthly Financial Stability Review, due tomorrow.
Monday, the NZ dollar fell 2.09 percent against the U.S. dollar, 1.82 percent against the yen, 0.34 percent against the euro and 0.97 percent against the Australian dollar.
In the Asian trading today, the NZ dollar fell to near a 3-1/2-month low of 1.0766 against the Australian dollar and near a 2-month low of 0.7327 against the U.S. dollar, from yesterday’s closing quotes of 1.0755 and 0.7332, respectively. If the kiwi extends its downtrend, it is likely to find support around 1.08 against the aussie and 0.71 against the greenback.
Pulling away from an early high of 88.27 against the yen, the kiwi dropped to a 2-month low of 88.00. The kiwi may test support near the 86.00 region.
Against the euro, the kiwi edged down to 1.5207 from yesterday’s closing value of 1.5196. On the downside, 1.53 is seen as the next support level for the kiwi.
Looking ahead, Japan leading and coincident index for March is due to be released at 1:00 am ET.
In the European session, U.K. industrial and manufacturing production for March and Australia annual budget are slated for release.
At 3:00 am ET, EU’s Economic & Financial Affairs Council is due to meet in Brussels.
In the New York session, U.S. NFIB small business index for April and U.S. Treasury Budget statement for the month of April are set to be published.
At 12:45 am ET, Federal Reserve Bank of San Francisco President John Williams is expected to speak on the economic outlook before the Association for Business Economics in New York.
The material has been provided by InstaForex Company – www.instaforex.com