We forecast the Reserve Bank will raise rates by the middle of the year as it works to damp inflation pressures that are still pronounced.
For the New Zealand dollar it looks like one-way traffic. The scenario for cutting rates is now realistic, if not urgent.
Housing construction is likely to be weak into the first half of 2006 and possibly beyond. It works against the tightening bias of the Reserve Bank.
We're short-term fans of the Australian dollar. The global demand for commodities is incredibly strong because of the global economy, which is doing very well.
If RBNZ Governor Alan Bollard needed more information to stop hiking interest rates, the house-building consents data today fit the bill.
The market hasn't been paying enough attention to inflation risks as it should. The prospect of an interest-rate move higher in the months ahead will mean the Australian dollar will find some friends.
The market hasn't been paying enough attention to inflation risks as it should.
The news should provide support for the Australian dollar with a hint that the trade balance will continue to narrow.
The Australian dollar should be doing better in the short term because the rate differential is still supportive.
Some of the highest interest rates in the world keep demand for the currency strong.
