Forex – NZD/USD sharply lower after RBNZ comments
The New Zealand dollar was sharply lower against the U.S. dollar on Wednesday after Reserve Bank of New Zealand Governor Graeme Wheeler said the currency is overvalued and warned that the bank is ready to intervene.
NZD/USD hit 0.8394 during late Asian trade, the pair’s lowest since February 12; the pair subsequently consolidated at 0.8406, down 0.74%.The pair was likely to find support at 0.8353, the low of January 25 and resistance at 0.8468, the session high.
The New Zealand dollar hit session lows after Wheeler warned that the kiwi was significantly overvalued compared to its economic fundamentals and added that he was prepared to intervene, saying the RBNZ would use the Official Cash Rate “as circumstances require”.
The comments came in a speech to the manufacturers and exporters association in Auckland. Elsewhere, the kiwi was sharply lower against the euro and the yen, withEUR/NZD jumping 0.95% to 1.5954 and NZD/JPY dropping 1.05% to 78.40.
The yen found support as signs of dissent within the government over Prime Minister Shinzo Abe’s push for more aggressive monetary easing steps emerged.
The Federal Reserve was to release the minutes of its most recent policy meeting later in the trading day, while the U.S. was also to release official data on building permits and housing starts.