Forex News

New Zealand Interest Rate Reaches Record Low at 2.5%


The Reserve Bank of New Zealand cut its benchmark interest rate from 3.0 percent to 2.5 percent to a record low level for the country’s economy.

New Zealand was one of the most punished countries by the global slump due to its commodity exporter economic profile and since July, the central bank has continuously cut the national interest rate from 5.75 percent to the current level of 2.50 percent and lowered taxes in order to ease the damages caused by recession. The New Zealand dollar and bonds have been certainly affected by lowered interest rates, since it obviously becomes less attractive for traders to keep investments in assets that have constant profit decreases.

The economists’ opinion indicate that the past and present Reserve Bank policy is leaving space for further cuts in the cash rate and that a reversal in this trend is not expected in the foreseeable future. New Zealand is facing its sixth quarter of recession, which immersed the country in the worst crisis for a period of more than 30 years, but even if the interest rates are constantly hitting record lows, they are still more attractive than other major economies’ rates, such as the Eurozone which is at 1.25 percent and the Japanese which is close to zero.

The NZD/USD remained stable while the NZD/JPY traded at 55.59 from 54.95.

If you want to comment on the New Zealand dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

Forex News

Chilean Peso Strengthens on Central Bank Policy Bets


The Chilean currency continues its six-month bullish trend as copper price goes up and the national bank is expected to cut interest rates to improve the economy.

In the second semester of the past year, the Chilean currency had a severe devaluation when the global slump scenario was confirmed, but since December, and despite the current problematic economic situation in the country, the peso has been constantly gaining value against some of the most important currencies, such as the greenback and the pound. Chile has lowered its interest rate more than 5 percent since the beginning of the crisis, and it is expected to continue its rate-cut policy as an effort to revive the national economy, which for the moment, has a rising unemployment rate and a contracting industrial sector.

The interest rate policy in Chile will remain the same and according to analysts, as long as the national economy reports weak data, the rates will be cut systematically. In the next meeting, which will take place in the following week, policy makers are expected to set a 1.5 percent rate, a cut of 0.25 percent from the current one. The price of copper is another factor that has an important role for the Chilean currency, a significant rise on its price during the past months is helping the peso to climb, since Chile is a major exporter of this commodity.

The USD/CLP traded at 581.05 from a previous price of 585.05.

If you want to comment on the Chilean peso’s recent action or have any questions regarding this currency, please, feel free to reply below.

Forex News

Canadian Dollar Continues Rise on Positive Economic Forecasts


The loonie posted gains for 5 weeks in a row, on speculations that the global financial turmoil is easing, pushing commodity prices up.

Canada’s currency has been a fantastic investment since the beginning of March, against its U.S. counterpart, having the biggest rally since November 2007 gaining more than 2 percent during the past week. This month has been an optimistic one if compared with the previous ones marked by extremely downturns in trading markets, and the Canadian dollar, being a high-yielding currency driven by risk appetite and commodity prices, had the opportunity to post solid gains after several months of significant losses.

Being one of the most correlated currencies with the equity markets, analysts expect that as long as stocks continue to recover from last year’s losses, the Canadian dollar is expected to strengthen, also pushed by commodity prices. Even if the current moment is extremely positive for the loonie, uncertainty still remains among economists, which avoid to confirm that the Canadian dollar is a good bet for the long term, claiming that days of growing risk appetite may move or not the global markets for the next weeks.

The USD/CAD closed this week at 1.1856 from 1.1930 in the intraday comparison. The CAD/JPY rose from 82.50 to 83.56.

If you want to comment on the Canadian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.