Foreign Central Bank Speak Behind Kiwi's Round Trip

Tuesday saw volatile price action from NZD/USD, which was trapped in the midst of cross-currents generated by hawkish offshore central bank rhetoric. The rate caught a bid after the RBA scrapped the reference to "patience" from its guidance on interest rates, but erased gains into the WMR fix and through U.S. hours as hawkish Fed members weighed in. The initial blow came from a remark by FOMC's Brainard that U.S. policymakers could start rapid balance sheet reduction as soon as next month, with her colleague Daly subsequently echoing this view.

• NZD/USD charted a Doji candlestick Tuesday, as it round tripped from $0.7034, its highest point since Nov 19. The rate now trades flat at $0.6947, while the local docket is virtually empty today.
• Bulls need to take out yesterday's high of $0.7034 before setting their sights on $0.7053, the high print of Nov 18. Bears would be pleased by a pullback under $0.6896, which limited losses on the first day of the month.