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NZD/USD slid to react lows of $0.6706 on the...>

KIWI: NZD/USD slid to react lows of $0.6706 on the back of the RBNZ MonPol
decision, last $0.6711, with AUDNZD registering a fresh YtD high of NZ$1.1080.
- The Bank left the OCR unch. at 1.75% as expected, but pushed the horizon that
it expects to hike the OCR by 25bp out into Dec 2020 from Mar 2020 previously.
- The Bank noted that the inflation path may be bumpy, stressing that it will
look through volatility, and that risks to inflation are broadly balanced, after
noting early signs of rising core inflation.
- The Bank noted that risks to growth are tilted to the downside highlighting
that the recent moderation in growth may last longer than exp., with low
business confidence potentially weighing on investment.
- The Bank also revised its NZD TWI exp. To 72.8 from 74.0, noting that it
expects the lower NZD to support export earnings.
- On the labour mkt front, the RBNZ now expects the unemp. rate to decline
modestly from current levels, with emp. around its "maximum sustainable level."
- NZD/USD bears focus on the YtD low of $0.6688, AUD/NZD interest in the figure
at NZ$1.1100, followed by the Dec 2017 high NZ$1.1114.
MNI London Bureau | +44 0203-865-3809 |
MNI London Bureau | +44 0203-865-3809 |

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