The NZD holds firm after the RBNZ leaves its OCR unchanged earlier today
The RBNZ left its OCR unchanged at 1.50% which led to a bit of a whipsaw in the kiwi but ultimately, the currency ran higher as the dust settles. NZD/USD dipped to a low of 0.6600 (testing the 100-hour moving average) but climbed back to rest near session highs above 0.6650 as seen currently.
The central bank hinted at more rate cuts to come - and one is almost certainly to materialise in August - but market pricing didn't move much - up to ~80% - considering that ~73% odds of that has already been factored in ahead of the meeting today.
Meanwhile, the dollar continues to gain further ground since overnight trading after Fed dove James Bullard effectively ruled out a 50 bps rate cut in July. Markets previously saw a ~40% probability of the Fed moving by that much but since Bullard's remarks, that has been slashed to just about ~21% currently.
As such, the dollar holds firmer on the day against most major currencies though the ranges are rather modest with exception of the yen. Bullard's remarks also saw Treasuries pare its advance overnight and that is leading yields higher into today with 10-year yields up by 2 bps to 2.00% now. The sentiment there is helping to keep the yen pressured with USD/JPY holding near session highs at 107.45 at the moment.
Looking ahead, we'll have some economic data points to move things along but nothing too major. The key focus today will be on the release of US data - durable goods and trade balance - alongside the bigger market focus on US-China trade talks later this week.
