August 17, 2021

Before the RBNZ Meeting took place, the 'Bomb' Has Exploded

 The New Zealand dollar plunged lower after the country discovered the first community case of coronavirus in Auckland's largest city, raising investor concerns over the outcome of the Reserve Bank of New Zealand (RBNZ) policy meeting on Wednesday.

The news comes just a day before the RBNZ is widely expected to be the first central bank among developed countries to raise interest rates since the pandemic hit.

This has pushed the kiwi dollar to plunge more than 1% to around 0.6945 against the US dollar towards the end of today's Asian session.

The Health Ministry reported the case today, which is the first case transmitted locally since February. However, it remains unclear whether the case is a delta variant.

With the discovery of one case of this community, it is enough to shake the country as their vaccination rate is still at a low level of around 19%, according to Our World Data.

New Zealand has shown success in combating the spread of coronavirus over the past year compared to other countries, and the economy also continues to show encouraging expansion.

Following that, investors expect the RBNZ to raise interest rates after some hawkish indications were given at previous policy meetings and strong economic data.