- An increase in the OCR to 8.25%, on the back of increases in food and oil prices
- The year end merchandise trade balance worsened to -$6,230m
- The exchange rate broke through $0.81US this week, just to fall back to $0.78US now.
As most analysts expected, the RBNZ lifted interest rates. They also said they were unlikely to raise them again. The big jump in the merchandise trade deficit was the result of a fall in export value from March, following a fall in Dairy volumes. This isn’t particularly surprising as this quarter often provides low dairy volumes, and high dairy prices had lead to a run down in stocks earlier in the year.
I’m not too concerned about exchange rate movements, except against the AUS. Have you seen the volatility in NZ$/AUS$ trading today, its been crazy. I just don’t like volatility, hurts my head.