Westpac in New Zealand out with a quick response to the Reserve Bank of New Zealand announcement earlier

(RBNZ announcement - on hold (as expected))

Via WPAC:

  • The key policy guidance paragraph stated: "Monetary policy will remain accommodative for a considerable period. Numerous uncertainties remain and policy may need to adjust accordingly." This is identical to May's paragraph.

Specifically on the New Zealand dollar:

  • The NZD exchange rate narrative was changed, noting the NZD's appreciation is partly justified by fundamentals

And, what else is new:

  • The Budget stimulus narrative is new.

On the currency response to the announcement:

  • The moderate rise in the NZD probably reflects widely held expectations the risks today were skewed slightly in a dovish direction; in the absence of any dovish surprise, NZD was bought.

NZD/USD: