The New Zealand dollar fell to its 6-month low level against the U.S. dollar after the Reserve Bank of New Zealand cut the interest rate by a quarter percent point in its first rate reduction in the last five years.
The New Zealand dollar went for a third day of losses today on the Forex market, making this week a biggest drop since mid May, as the Reserve Bank of New Zealand Governor Alan Bollard said that he may cut interest rates this year.
The New Zealand’s currency continued its extremely fast drop against the other major currencies today after the retail sales report was released yesterday at 22:45 GMT.
Both Australian and New Zealand dollar continued to rise today after the yesterday’s fast growth as the investors remained confident in the stock markets’ improvement and in the carry trade.
The New Zealand and Australian currencies continued their bearish trends against the Japanese yen today and dropped on Forex market during the Asian trading session, as the Japanese stock market plunged.
New Zealand dollar reached the two months high level against the Japanese yen and almost broke the more than 6 months record high level against the U.S. dollar today. Aussie also showed a similar dynamic of growth — it came close to the 2 months old records against yen and reached its highest value against the U.S. dollar since November 2007.
Today both the Australian and New Zealand dollars continued their daily growth against their counterpart from the United States on willingness of the Forex traders to earn from the interest rates difference.
New Zealand dollar is showing a high level breaking growth today against the U.S. dollar after the confidence in the carry trade and other high-risk investments rose on the Fed’s rate cut expectations.
Both Australian and the New Zealand dollars gained today on a presumption that the international investors bought Australia’s and New Zealand’s government bonds as their premiums yield more than their U.S. and Japanese counterparts.
Japanese yen restarted its falling against other world currencies today (even against the dropping dollar) as the risk hungry investors begin to reenter carry trades. While the Nikkei 225 index gained a little more than 1 percent - first rising day after four consecutive losing days, Yen lost more than 1 percent of its value to the high-yielding currencies.