New Zealand's central bank dampened expectations of a big interest rate hike when it meets next month, with comments on Tuesday that indicated it may take a more cautious approach.
The New Zealand dollar last traded 0.2per cent weaker at US$0.7015, having touched a three-week low of US$0.7000 earlier in the session in response to the RBNZ comments. One-year swap rates dropped to 1.07per cent from 1.15per cent. "The RBNZ stressed today that in times of uncertainty, a measured policy approach is appropriate...," ANZ Bank Chief Economist Sharon Zollner said in a statement.
In his speech that used indigenous Maori reference throughout, Hawkesby said the more adaptable white heron is a more fitting metaphor to describe the central bank's approach to monetary policy decisions in times of uncertainty than the traditional"hawk" that signals higher interest rates or"dove" signalling lower rates.