The market reaction in NZD/USD is not what the RBNZ had hoped for: the central bank in New Zealand left the interest rate unchanged at 2.5% and mentioned that the high value of NZD is hurting the economy.
Unfortunately for the authorities in New Zealand, the comments about house price inflation are seen as a hint for potential rate hikes. In addition, the RBNZ said that the economic conditions of trade partners are improving. The positive sentiment also helps the kiwi.
NZD/USD is now trading at 0.8342, up over 20 pips from the announcement and nearly 50 pips from the day’s lows.
Earlier, the Federal Reserve in the US made its decision: no change in policy was announced: QE will continue.
