NZD/USD Surges After RBNZ Decides to Keep Rates on Hold
Following the RBNZ monetary policy meeting when it decided to keep interest rates steady, the New Zealand dollar has surged by 1% against the US dollar on the less dovish than expected stance of the central bank. At the time of writing, NZD/USD is trading just above 0.64.
The RBNZ’s interest rate decision came as a surprise as markets were widely expecting another rate cut announcement. Futures markets had pegged the likelihood of a rate cut at over 75% on account of weakening spending and global trade tensions weighing on the trade-reliant NZ economy.
The RBNZ stated that its decision to ease the monetary policy aggressively earlier this year had kept the economy at a good place, but it has not discounted the possibility of turning dovish in the near future. According to Governor Orr, the decision to keep interest rates steady was a unanimous one, further strengthening the appeal of the NZD.
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