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Will The New Zealand Dollar Continue To Fall?

October 1, 2014 0 Comments

The New Zealand dollar has become one of the worst performing currencies in the foreign exchange market during the third quarter, and despite the recent tightening of monetary policy by the Reserve Bank of New Zealand (RBNZ).

In February, the team called for a possible drop in the kiwi with an adjustment of 10-15% of its exchange rate against the major currencies. Eight months later, it appears that our long-term forecasts are underway as the New Zealand central bank hardens its tone vis-à-vis the current exchange rate of NZD and even intervenes to Forex to depreciate the currency.

The New Zealand dollar, can it fall further?

On September 25, the governor of the RBNZ, Graeme Wheeler, said that the exchange rate of the New Zealand dollar was “unreasonable and unsustainable.” This is not the first time that the central bank mentioned the high cost of kiwi, but the reaction of market participants suggests that the currency still has the potential to go down as it is unlikely that the RBNZ is still something its rate interest before 2015.

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