The
New Zealand dollar dipped against its U.S. counterpart on Wednesday after the Reserve
Bank of New Zealand held interest rates and pointed to further stimulus if
needed.

The
NZDUSD pair traded lower at 0.6442, easing from its highest level since June 11
recorded at 0.6533 on Tuesday.

The
central bank decided to keep the official cash rate at 0.25 percent and the
size of its quantitative easing programme at NZ$60 billion
, while
declared readiness “for the use of additional monetary policy tools as needed.”

“The
Monetary Policy Committee is prepared to provide additional stimulus as
necessary,”
the RBNZ said.

In
the coming months, the central bank may announce measures encompassing “a term
lending facility, reductions in the OCR, and foreign asset purchases, as well
as reassessing the appropriate quantum of the current LSAP,”
the statement
mentioned.

The
RBNZ will adjust the size of the LSAP program
in August according to the
economic situation, especially as the tourism industry remains annihilated by
border closures due to the spread of the virus worldwide.

The
appreciation of the kiwi has resulted in diminishing export proceeds and blunted
the inflation outlook, the RBNZ highlighted.

On
the other hand, the US dollar index soared to 96.77, with the shift from
optimism to pessimism as seven U.S. states reported marked increase in Covid-19
new infections.

Frets
regarding a second wave of corona infections pushed European shares down to
their lowest level in nearly a week.  

The
Euro STOXX 600 slipped 1.14 percent to 363.20, failing to trail a rally to
four-month high recorded in Asian shares, where a better than forecast business
confidence reports from France and Germany were not capable of improving the
sentiment.

Gold
extended its advance for a fourth consecutive session to a zenith of $1773.45
an ounce, the highest since October 2012.

Later in the day, the
International Monetary Fund
may proclaim a more negative outlook for the
world economy when it releases its new global economic forecasts

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