The New Zealand dollar faces pressure in its first full week of trading in 2011 as support for the greenback is bolstered by upbeat US data and renewed fears about European debt.
If the good news is that the Reserve Bank expects rates to be lower for longer, the bad news is why it thinks that.
Reserve Bank Governor Alan Bollard isn't expected to start hiking interest rates again until the middle of next year after he held the official cash rate at 3 per cent today.
I worry that the banks are trying to unleash those animal spirits in the housing markets again.
The Reserve Bank has left the Official Cash Rate on hold at 3 per cent. In his Monetary Policy Statement, Governor Alan Bollard said the pace of economic growth 'appears to have moderated'.
The financial market now expects the Reserve Bank will not increase the OCR from 3 to 3.25 per cent until June next year.
Ireland's travails may be short-lived, but the eurozone's future is not looking good.
The New Zealand dollar will try to break above 80 US cents this week after the Federal Reserve said it will start printing US$600 billion.
Ben Bernanke is set to embark on an unprecedented second round of unconventional monetary easing.