New Zealand’s Q2 GDP data, released today, were poor. Reconstruction work following then earthquake will lift growth over the next 12 months but high headline figures will hide an underlying trend which is weak given on-going household sector deleveraging. The Reserve Bank (RBNZ) is nowlikely to keep monetary policy on hold until March 2011. With policy rates in Australia set to move up again in October or November, the Kiwi dollar will probably fall further against the Aussie dollar.
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