NZD/USD popped higher before taking a..........>

KIWI: NZD/USD popped higher before taking a nosedive as the RBNZ delivered its

monetary policy decision, leaving the OCR at 0.25% and expanding its

asset-purchase programme to NZ$60bn, in line with expectations. The initial

uptick occurred as BBG ran headlines from the MPC, reaffirming the forward

guidance that the OCR will remain unchanged through Q1 2021, which disappointed

those counting for further rate cuts this year. However, NZD/USD dived

immediately thereafter as the RBNZ reiterated that a negative OCR will become an

option in future, amid ongoing discussion with banks to make it operationally

possible. It seems that failure to play down potential for bringing the OCR into

negative territory has delivered a hit to the kiwi, with the RBNZ expressing its

preparedness to reduce the rate if needed. Key snips from the RBNZ's statement

have been covered in earlier bullets.

- NZD/USD sits -35 pips at $0.6042. It has penetrated yesterday's low, but the

technical picture described in the previous KIWI bullet remains in play.

- AUD/NZD trades +45 pips at NZ$1.0693. The rate showed above May 7 high/round

fig. at NZ$1.0699/0700, but pulled back leaving these lvls in focus.