Currency talk: OCR decision looms
Jason Walls and ASB Bank's Tim Kelleher discuss the global currency market news on NBR Radio and on demand on MyNBR Radio.
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Few analysts or economists think the Reserve Bank will cut the official cash rate (OCR) this Thursday.
Even after the disappointingly low consumer price index (CPI) figures released last week – which revealed a 0.5% fall in the three months ended December 31 – market pricing for a cut is not high.
But many are holding out for any comment or indication governor Graeme Wheeler may give about further OCR cuts.
ASB head of institutional FX sales Tim Kelleher says the inflation figures came in below many people’s expectations.
Despite the kiwi dollar falling markedly in 2015 – climbing as high as 77USc before falling to 63USc – there is still “no inflation, anywhere” Mr Kelleher says.
He says extremely low oil prices have been working to keep the CPI down – not just in New Zealand but all over the world.
The low CPI figure gives more weight to the calls some have been making for a cut to the official cash rate.
Mr Kelleher is expecting a cut in June, then potentially another in August.
Meanwhile, the kiwi dollar has sunk below 65c against the US dollar. Global volatility has forced the kiwi dollar down against many of the major global currencies.
NBR Radio
Tue, 26 Jan 2016
Tue, 26 Jan 2016
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Currency talk: OCR decision looms
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