RBNZ Assistant Governor Christian Hawkesby told Bloomberg that the decision to stand pat on OCR last week was mostly due to communications problem. It’s hard to explain the case when if the rate hike was delivered on the same day as New Zealand returned to pandemic lockdown.
He added that the decision was not due to risks and the policy decisions “won’t be tightly linked” to COVID -19. Demand as proven to be more resilient than anticipated.
Most surprisingly, Hawkesby also indicated that the central bank has considered a 50bps rate hike. “A 50 basis point move was definitely on the table in terms of the options that we actively considered,” he said.
NZD/USD’s rebound form 0.6804 accelerated higher today but stays well below 0.7087 resistance so far. It’s too early to say that the corrective pattern from 0.7463 has completed, with NZD/USD staying even below 55 day EMA. NZD/USD could have another dip to 38.2% retracement of 0.5467 to 0.7463 at 00.6701 before resuming the medium term up trend.
