The second week of March does not have a heavy central bank calendar although rate decisions by the Reserve Bank of New Zealand, the Bank of Korea, Bank of Thailand and the Central Bank of Russia will be crucial for respective markets.
In addition to the rate meetings, remarks by a few Fed officials will be watched, especially in the background of the much stronger than expected February jobs report from the US.
Other central bank publications of interest will be the US labor market conditions index, due on March 9, and then the Bank of England quarterly bulletin on Friday, NewsNow reported.
The sharp gains in the dollar and the reasons as well as subsequent weakness in other currencies will likely feature in central bank statements and remarks this week, traders say.
The RBNZ has its official cash rate at 3.5% after the 100 basis points hike last year. The central bank is unlikely to alter rates this time despite inflation dropping to a one-year low of 0.8% in the December quarter as GDP growth is keeping momentum.
New Zealand believes that despite the recent downsides, its currency is fundamentally strong considering the sharp drop in commodity prices.
That said, the RBNZ in its statement on March 11, might take comfort from the kiwi dollar’s 2.6% decline within just a week of March, which reversed much of the 4% jump in December.
The BoK and CBR will set rates on March 12 and both are on a rate cutting cycle. The former has it at 2% and the latter at 15%. Korea has cut the base rate by 50 basis points in 2014 and Russia in January reversed by 200 basis points the more than 1,000 basis points increase during last year.
