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  • The NZD/USD jumped 100 pips to 0.6828 post-RBNZ rate decision.
  • RBNZ kept the interest rates unchanged at 1.75 percent and said the next move in rates could be up or down.
  • NZ-US bond yield differentials remain depressed near three-month lows.  

The bid tone around the NZD strengthened, sending NZD/USD well above 0.68 after the Reserve Bank of New Zealand (RBNZ) kept the  interest rates unchanged 1.75 percent.  

The central bank said that employment is near max sustainable level and pledged to keep cash rate expansionary for a considerable period. The bank added further that the next move in rates could be up or down while citing both upside and downside risks to inflation.  

The positive response from the NZD suggests the markets were likely positioned for a much move dovish RBNZ.  

That said, the NZD/USD could retrace the 100-pip rally seen in the last few minutes as the 10-year NZ-US yield spread is still hovering at a three-month low of -58.78 basis points.  

The Kiwi could extend the post-RBNZ rally if the yield spread begins to rise in the NZD-positive manner.  

Technical Levels