The NZD/USD traded a fairly tight range over the past 24-hours after the previous day’s sharp fall. It trades around0.8330 currently. There is increasing speculation over the presence of theRBNZ in the currency markets at the start of the week.However, we are unlikely to receive final confirmation untilthe release of the RBNZ’s August reserve statistics at theend-September. Some modest ‘passive’ intervention maybe shown, and may indeed continue in comingweeks/months. However, we believe this will fall short of‘active’ or noisy intervention, as seen in 2007, which wouldseem in consistent with the RBNZ’s broader monetarypolicy stance. This is still one of a tightening bias, as theOCR is seen some way below ‘neutral’ (circa 4.25%).
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