Overnight, the Reserve Bank of New Zealand cut their interest rates by 50 basis points, bringing their rates down to 4.25%. Surprisingly the New Zealand Dollar rose by almost 1% off the back of this, mainly due to initial expectations of a 75-basis point cut. In the press conference afterwards, Governor Adrian Orr crucially left the door open for another 50-basis point cut in their next meeting, February 2025.
Elsewhere this week, we are still seeing Sterling hold its own against The Euro and this is down to a growth differential between The Eurozone and The UK. Current growth forecasts for The Eurozone are constantly revised lower compared to The UK due to fragile economic performance in The Bloc, as well as slowing inflation. On top of this, Donald Trump's election victory is also weighing down on economic sentiment as potential trade tariffs would present another crucial blow to any possible recovery.
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