After the RBNZ left rates ‘on hold’ yesterday morning theNZD/USD showed a knee-jerk gap lower. It trades at0.8140 this morning.Yesterday the RBNZ left its Official Cash Rate unchangedas we expected. As the market had been pricing around a35% chance of a 25bps hike ahead of the meeting, thecurrency’s immediate response was to gap lower when itwas not delivered. This was understandable despite thefact the tone of the RBNZ’s statement was actually fairlyhawkish.
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BNZ