Kiwi sinks as RBNZ retain optionality of......>

FOREX: Kiwi sinks as RBNZ retain optionality of negative rates

- NZD is comfortably the poorest performer so far Wednesday, responding to the

RBNZ rate decision overnight. While rates and the OCR projection were kept

unchanged (as expected), focus fell on the bank noting that they are working

with banks on the logistics behind negative policy rates, which will be an

option in the future. The RBNZ also re-affirmed that they are prepared to cut

the policy rate further if required. NZD/USD responded by edging back below the

$0.6021 50-dma before finding some support ahead of last week's lows at $0.5995.

- Elsewhere, markets are more mixed, with no major pairs showing outside of

recent ranges. The late pullback in US equities Tuesday has exerted some

pressure on USD/JPY, but Y107 remains in tact for now.

- A speech from Fed chair Powell will likely be the focus, speaking at

1400BST/0900ET on 'current economic issues'. Markets will be keenly watching to

see if Powell reiterates comments from Bullard and Kaplan - who both spoke out

against negative rates yesterday. Text is due to be released, with a Q&A

following shortly afterwards.