The New Zealand dollar edged up to $0.572 on Wednesday but remained near a six-month low, as investors digested Reserve Bank of New Zealand Chief Economist Paul Conway’s remarks. Conway said that the RBNZ remains open to further rate cuts if necessary, although policymakers want to wait for more data before making a decision. However, he noted that the central bank does not expect to use additional monetary policy tools again anytime soon, adding that it is unrealistic to expect monetary or fiscal policies to offset every economic shock. Still, markets are pricing in around an 85% probability that the RBNZ will cut rates by 25bps at its November meeting, with some expecting rates to fall to 2.0%. Moreover, rising tensions between the US and China injected fresh uncertainty into global markets and dampened risk appetite, which tends to pressure the trade-exposed Antipodean currency.
