NZD/USD trades 1% lower with AUD/NZD up 1% in response to new RBNZ Governor Orr's first Monetary Policy Statement outlining a 'balanced' rate outlook nL3N1SG6U7.
He appears happy with that result, noting later that the realization that the bank is going to retain its policy position is filtering through to markets, pushing the NZD lower nS9N1QG01H.
Like most central bankers in the developed world, Orr would rather see a softer than a stronger currency.
The market perception is that a balanced RBNZ outlook is more dovish than the RBA's stance that their next rate move will be a hike, so AUD/NZD jumped.
Yet in reality both central banks are on long-term hold and a major change in economic/inflationary expectations - probably triggered by an external event - would be needed to prompt an earlier move, which most likely would hit both economies.
Thus the NZD/USD move seems justified as an extension of the strong downtrend, with the break of 0.6936, 76.4% of the 2017-2018 bounce, opening the door for 0.6781, the 2017 low.
The bias is lower while 0.7008, the 10 DMA holds on the close.
The spike in AUD/NZD may hit headwinds at 1.0800-90, the Feb, March peaks, 61.8% of the 2018 fall and the 200 DMA.
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