25 October 2016, 07:48
By James GlynnSYDNEY--The New Zealand dollar ended little changed in Asia Tuesday as traders focused on the next central bank policy meeting in mid-November.
At 0430 GMT, the New Zealand dollar was trading at US$0.7145, down slightly from US$0.7150 at the same time Monday.
Bets on a rate cut in November remain strong. Interest rate futures markets Tuesday implied about 30 basis points of cuts over the next year.
Economists are, however, debating whether a cut next month might be the last for the Reserve Bank of New Zealand in the current cycle.
ANZ said it removed a forecast for a second interest rate cut after the one that is likely in November, which was penciled in for early 2017.
"There are certainly still reasons why the RBNZ could get dragged back to easing, but when balanced against strong domestic growth, emerging capacity strains, rising domestic inflation pressures and some signs of a turn in the global inflation cycle," additional rate cuts have become harder to justify, ANZ added.
The Reserve Bank of New Zealand also announced changes to the way it will forecast interest rates in each policy statement, but stressed the change will have no impact on decision making at the central bank.
Starting in November, the RBNZ will no longer provide forecasts for 90-day bank bills. Instead it will provide a forecast track (similar to the U.S. Federal Reserve's so-called dot points) for the benchmark interest rate.
The RBNZ no longer has confidence that movements in the bank bill rate reflect the path of its benchmark rate over time. The change will have no impact on the actual setting of rates, said Annette Beacher, head of Asia-Pacific economic analysis at TD Securities.
-Write to James Glynn at james.glynn@wsj.com
