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KIWI: NZD/USD holds steady, last $0.6779, after the RBNZ Bank left its OCR unch.
at 1.75%, as was unanimously exp. The NZD initially knee-jerked higher as the
RBNZ removed its language re: next move in the cash rate could be up or down,
now stressing data dependence & highlighting 2-way risks, which allowed the NZD
to retrace its knee-jerk. RBNZ Gov. Orr opened his press address with the line
"we are not taking rate cuts off of the table." He stressed data dependence,
noting that the Bank would consider a rate cut if GDP fell short of exp. The
Bank's inflation exp. was revised slightly higher, although it highlighted
willingness to look through an uptick driven by higher fuel prices.
- RBNZ still exp. GDP to move higher in '19, with biz conf & investment still a
concern, pointing to downside risks to its growth exp. The RBNZ left its OCR
track unch, despite its higher inflation exp., stressing that it expects the OCR
to remain unchanged into '20, with Orr later noting that the Bank is comfortable
with its foot on the accelerator, according to BBG.
- NZD/USD bulls continue to look for a close above $0.6800, with bears needing a
move back below the Nov 02 high at $0.6690.
MNI London Bureau | +44 0203-865-3809 |