Kiwi current level is “unjustified and unsustainable”

Main Points for Today

•      Kiwi current level is “unjustified and unsustainable”

–    RBNZ in a statement released today said that it considers the current level of the exchange rate “unjustified and unsustainable” and further downward adjustment is expected

–    Three main reasons that can cause further NZD depreciation:

•      Declining commodity export prices

•      Slowdown in China’s economic growth

•      Strong outlook for the US economy

•      AUD also fell due to kiwi sell-off

•      Chinese central bank Governor may be replaced amid a personnel reshuffle

–    Top contender to head the People’s Bank of China, is considered to be a former banker and securities regulator

–    Today:

–    Eurozone:  ECB President Mario Draghi speech and Eurozone’s M3 money supply

–    Sweden:  PPI for August

–    US: Durable goods orders for August The headline figure is forecast to drop 18.0% mom, from +22.6% mom in the previous month. On the other hand, durable goods excluding transportation equipment are estimated to rise on a mom basis