During the overnight trading session, the Reserve Bank of New Zealand released its financial stability report, which is published semiannually. The report highlighted the increase in financial risks, noting that there were strong headwinds from the downturn in dairy prices and higher housing prices in Auckland. China's economic headaches were mentioned, being cited as having a major impact on New Zealand's economy in terms of lower commodity prices. The RBNZ noted that there was less scope of monetary policy easing which could offset the rise in funding spreads. On the exchange rate, the report noted that the weakness in NZD was important to acting as a buffer for the economy. The Kiwi dollar reacted strongly to the fact that the report mentioned less scope for monetary easing. NZDUSD closed with a doji candlestick pattern at 0.6528 with a bullish close today potentially leading to a short-term correction.
Pound Sterling Looks for a Correction
Daily Analysis - 11/11/2015