Westpac on the RBNZ decision & targets for NZD/USD & AUD/NZD

Quick analysis from Westpac in New Zealand (Imre Speizer) of the Reserve Bank of New Zealand decision. In summary:

• Slightly more dovish language than June ... but not as strong as the market was hoping for
• The previous warning about the high NZD exchange rate was repeated in different words
• Dropping of the explicit reference to being "overvalued" will probably have disappointed the market
• We expect these reactions may be sustained overnight as speculative positions are rebalanced further
• NZD/USD targets a test of 0.6555 resistance, and AUD/NZD should head towards 1.1020 support

(I think that 0.6555 resistance is a typo and should be 0.6655)