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New Zealand Dollar Falls as RBNZ Considers Unconventional Policy Strategy

Investing.com - The New Zealand Dollar fell on Tuesday in Asia after the Reserve Bank of New Zealand said it had done contingency planning for unconventional monetary stimulus.

The work is currently “at very early stage,” the central bank added.

“The announcement shows that the N.Z. economy is no longer immune to unconventional policy,” said ANZ.

“This should help take a bit of the heat out of the NZD, which has lacked much RBNZ direction of late,” it added.

The NZD/USD pair last traded at 0.6732 by 12:09 AM ET (04:09 GMT), down 0.4%.

The USD/CNY pair was little changed at 6.8822.

On the Sino-U.S. trade front, the South China Morning Post reported that U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are likely to travel to China next week for negotiations with Vice Premier Liu He.

Tension between China and the U.S. remained high after U.S. President Donald Trump maintained pressure on Beijing last week by renewing a threat to impose tariffs on another $325 billion of Chinese goods.

Looking ahead, central banks meeting will be in focus as the European Central Bank is due to meet on Thursday, which is followed by the Bank of Japan and then the U.S. Federal Reserve next week.

The GBP/USD pair slipped 0.1% to 1.2457. U.K. Prime Minister Theresa May’s successor is announced on Tuesday.

The USD/JPY pair gained 0.2% to 108.06. In a note that was cited by Bloomberg, Goldman Sachs (NYSE:GS) said the Japanese yen is a cheaper option than gold for traders looking for safe-haven assets.

“Implied volatility and options-call skew are expensive now for gold and buying calls on the yen appears attractive,” analysts at Goldman said. “With gold positioning becoming more stretched, the yen might be a more attractive hedge tactically.”

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