On balance, last week’s developments were a clear positive for New Zealand interest rates, with a more hawkish US Fed and a stunning local consumer confidence report outweighing a GDP outturn that was a touch weaker than expected. The news that overshadowed everything last week was the US Federal Reserve’s signal that it could start ‘tapering’ its rate of asset purchases later this year, if the US economy continues to improve in line with its forecasts. In the resulting market rout, the NZ dollar has fallen more than 3% against the US dollar while wholesale interest rates have risen more than 10 basis points over the past week.
Read the full report: FX Research
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