The New Zealand dollar was up for more than 0.8 percent to the level around 0.7100 to the USD. That was happened on the European sales session yesterday and noted it’s highest increase amidst the major pairs.
Some factors which support that kiwi rally are the New Zealand central bank announcement (RNBZ) which is in line with the market expectation and the recovery of the global risk-on sentiment.
NZD/USD has been declined in the last stage. That was happened last month because of the New Zealand Government decision which reprogram the policies about the property tax. However, there is one more thing.
The recovered global risk sentiment is now making the investor capital wave enters back to that country. Furthermore, some parties thought kf RNBZ announced the flat announcement yesterday.
The Monetary Stimulus Won’t Be Stopped
The committee agrees that in line with their smallest risky plan, the monetary stimulus will not be stopped. That is until they are sure that the employment and continuous consumer price inflation target has been reached.
RNBZ decided to maintain the interest rate in the level of 0.25 percent and will not change the assets purchasing scale this time. They also state that adding the stimulus is possible if it is needed.
However, RNBZ does not reject any speculations about the interest rate increase next year explicitly. RNBZ comes and goes without any big excitements. They do the opinion to decline the OCR.
That is why; most people don’t believe it anymore. Just like other central banks, RNBZ is still trying to push the inflation and make it reaches for more than 2% as the target before increasing the rate.
This Year Inflation is Temporary
The inflation increase for this year is maybe temporary. It is because there is not any central banks which can increase the interest rate lately. In this context, the market speculation is the fastest projection.
It is especially if you compare it to other major banks. Furthermore, on Monday the Australian Statistic Institution published the consumers' trust data. It rose by 6.2% from 111.8 became 118.8.
The index is based on the Westpac Banking survey result and it also reaches the highest achievement since August 2010. Mostly, the increasing data above are supported by the growing optimism.
It is amidst the strong housing market. The price of houses in Australia has been stronger for about 5.8% during this year. In addition, the employment sector is also getting better. The data show the details.
The Detail Data in April
Based on the report, the significant increase happened on almost the sub-index. The current financial condition is up from 91.3 to become 103.5. The expert believes that it will still getting better in the future
The Australian consumers’ trust data release yesterday morning supported the Australian dollar movement to the USD. The AUD / USD pair was around 0.7646. That was 0.11% stronger than the daily open.
The USD weakening also supports that situation so far. The USD weakening amidst the inflation jump happened because of the commitment owned by The Fed about their decisions.
The Loose Policies by The Fed
The loose policies are maintained by The Fed until some years although inflation experienced an increase. The data released will not change the Fed’s prospect due to the low interest rate that they have.
They may maintain it for a long time. The experts see that the inflation jump as a temporary action before finally it will go down again. That thing has been quite reasonable until now.
That is why; market participants are still so careful in deciding their further actions. They need to look the surrounding progress. That becomes an important base for them.
