NZD Bid After Uninspiring RBNZ Decision, USD Extends Losses

The RBNZ's Monetary Policy Review was expectedly uninspiring and thus smoothly digested, albeit NZD/USD implied vols fell after the decision, with 1-month tenor printing lowest levels in more than a year. Spot NZD/USD pierced resistance from Apr 5 high of $0.7070 and accelerated gains thereafter, with BBG trader source flagging interbank purchases to cover buy stops above that level. The kiwi showed at its strongest levels in three weeks vs. both USD and AUD.

• NZD strength spilled over into AUD, to a degree. The Aussie had earlier ignored a strong Westpac Consumer Confidence print, with headline index surging to levels not seen since 2010.
• The DXY extended Tuesday's losses as participants assessed familiar developments. The greenback's weakness allowed USD/JPY to penetrate support from Apr 8 low/round figure at Y109.00.
• The PBoC set its central USD/CNY mid-point at CNY6.5362, just 2 pips below sell-side estimates and the sixth lower fix in a row.
• KRW led gains in Asia as South Korea's unemployment fell for the second month, while export prices recorded the fourth straight monthly gain.
• Coming up today we have EZ industrial output, Swedish CPI and comments from Fed's Powell, Clarida, Williams, Bostic & Kaplan, BoE's Haskel as well as ECB's Lagarde, Schnabel, de Guindos & Panetta.