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Drop in OCR from the trading floor
Media Comment
12th March 2009
Drop in OCR from the trading floor
Sargon Elias, general manger, CMC
Markets New Zealand, said that from a trading perspective
the 50bp cut in the OCR was at the bottom of the expected
range.
“Normally you would expect the NZD to drop, but this was already baked into the price and as it was on the low end some traders were wrong footed as they were short on the NZD, but others had seen this coming after the Australians held their rate last week.”
The cut has reinforced that the 50c level is a real level of resistance for the kiwi dollar the NZD is now trading nearly a cent higher at over 51c.
“The interesting thing is that we now have a lower OCR than Australia and as a lot of NZ money comes from overseas in particular Japan, it could make it harder for our banks to get money from overseas. However the Australians will probably live to regret not cutting their rate” says Elias
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