Kit Juckes, economist at Societe Generale explained that the RBNZ, as
expected by the majority of people who forecast RBNZ moves, cut the Cash
Rate to 2.5%.
Key Quotes:
"The Kiwi took off like a grouse and so far, the FX market has not been able to shoot it down. A bit like the Euro? The market conclusion is that the RBNZ may be done, which may, or may not be true (the Chinese economy will have something to say here, methinks). But it all makes next week even more complicated.
As dollar longs are pared back, we could get to the FOMC meeting either with the market braced for dollar weakness or, alternatively, with a drastically recued dollar short that leaves the way open for a rate hike to be dollar-friendly. Get your psychology hat on, this has little to do with economics."
Key Quotes:
"The Kiwi took off like a grouse and so far, the FX market has not been able to shoot it down. A bit like the Euro? The market conclusion is that the RBNZ may be done, which may, or may not be true (the Chinese economy will have something to say here, methinks). But it all makes next week even more complicated.
As dollar longs are pared back, we could get to the FOMC meeting either with the market braced for dollar weakness or, alternatively, with a drastically recued dollar short that leaves the way open for a rate hike to be dollar-friendly. Get your psychology hat on, this has little to do with economics."
