Wednesday, January 27, 2016

Forex - Kiwi largely steady after RBNZ holds at 2.5%, FOMC pondered

Investing.com - Investing.com - The New Zealand dollar held mostly steady after the central bank held rates steady and reverted to an easing bias, while investors decoded the Federal Reserve move to hold steady with few signals on the timing of any future hikes.

NZD/USD traded at 0.6427, down 0.02%, while AUD/USD changed hands at 0.7026, up 0.01%. USD/JPY changed hands at 118.64, flat.

Ahead in Asia come retail sales from Japan with a 0.1% year-on-year gain seen in December. In Australia come the import price and export price indices.

Federal Reserve policymakers left interest rate settings unchanged Wednesday as their first Federal Open Market Committee meeting of 2016 ended amidst global financial turmoil and economic anxiety.

The FOMC, which raised the federal funds rate by 25 basis points after seven years near zero Dec. 16, gave no hint of when it might raise that and other short-term interest rates again, although its acknowledgement of threats from "global economic and financial developments" could potentially mean greater delay.

Neither did it give any indication it is backing away from the "gradual" rate normalization strategy announced last month.

The vote to keep the funds rate in a target range of 25 to 50 basis points was unanimous.

Elsewhere, the Reserve Bank of New Zealand left the official cash rate unchanged as widely expected but reverted to an easing bias just one meeting after it changed stance for steady interest rates.

In a statement Thursday, the RBNZ said headline inflation is expected to increase over 2016 but it will now take longer to reach the target range than previously expected, indicating an easing may be required to achieve this earlier.

"Monetary policy will continue to be accommodative. Some further policy easing may be required over the coming year to ensure that future average inflation settles near the middle of the target range," the RBNZ said.

"We will continue to watch closely the emerging flow of economic data," the RBNZ said.

The U.S. dollar index, which measures the greenback's strength against a trade-weighted basket of six major currencies, was quoted down 0.05% at 99.03.

Overnight, the dollar pared losses against the other major currencies on Wednesday, after the release of upbeat U.S. housing sector data..

The U.S. Commerce Department said new home sales rose by 10.8% to 544,000 units last month, compared to expectations for a gain of 2.0% to 500,000.
New home sales in November were revised up to 491,000 units from a previously reported 490,000 units.

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Forex - Kiwi largely steady after RBNZ holds at 2.5%, FOMC pondered Rating: 4.5 Posted by: Unknown

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