[ad_1]
- The NZD / USD jumped 100 pips to reach 0.6828 post-RBNZ rate decision.
- The RBNZ kept interest rates unchanged at 1.75% and said the next rate move could be up or down.
- The yield spreads between the New American and New Zealand bonds remain depressed to levels close to their lowest level in three months.
The tone of the offer around the NZD is strengthened, sending the NZD / USD well above 0.68 after the New Zealand Reserve Bank (RBNZ) has maintained rates of Interest unchanged at 1.75%.
As part of a planned regime shift, the central bank is committed to keeping the overnight rate at 1.75% by 2019 and 2020 and said the next move rates could go up or down. The central bank also raised the downside risks related to inflation and stressed the need to maintain policy support, core inflation of consumer prices remaining below the target of 2 % fixed at mid-term.
The NZD's positive response suggests that the markets were probably positioned for a much more accommodating RBNZ.
That said, the NZD / USD pair could return to a portion of the 100 pips rally observed in the last few minutes, as the 10-year NZ-US yield gap is still at its lowest level in three months – 58.78 basis points.
Technical levels
Source link
