Press conference from RBNZ Governor Wheeler

  • Says NZD is 5% higher than projected in December
  • House price inflation in Auckland 'coming off' but it's still early days
  • Long-term inflation expectations well anchored
  • Expectations had begun to adjust downward and that was a concern
  • Rate projections build in two cuts
  • If a cut or more occurs, it will be based on the data

McDermott:

  • Part of the cut today was managing inflation expectations and making sure they don't fall too far

The comment on cuts based on data might remove a bit of the impetus to sell NZD.

More:

  • RBNZ will closely watch the REINZ house sales data to be released on Friday
  • Most central banks would like to see lower FX rates
  • Happy govt brought forward some capital spending
  • I think it's quite likely the IMF will reduce international growth forecasts in April