New Zealand - RBNZ edging closer to cutting rates

Although the Reserve Bank of New Zealand (RBNZ) once again left interest rates unchanged today, theshift from a neutral policy bias to an implicit loosening bias supports our view that interest rates willbe cut from the current 3.5% to 3.0% by the end of the year. The New Zealand dollar has weakenedin response and it could eventually decline to around US$0.70 from US$0.76 now.

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