June 4, 2008 21:54

Fundamental Alert – NZ Bank to Lower Interest Rates

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6-4-08

21:57 GMT – RBNZ signalled that they would begin lowering interest rates by the end of the year to combat a softening economy. With Bernanke of the Fed signalling a stop or even a raise of interest rates by the end of ’08 look for the NZ to continue to weaken against the USD as “smart money” (big banks using carry trades) begin to pull out of this pair in favor of more stable pairs. This could be the start of a downtrend in this pair for a few years.

After the announcement the pair immediately dropped over 100 pips to .7700

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