The AUDNZD pair has stayed pressured following this morning's RBNZ policy decision.
There was no major surprises from the bank, but maintaining a 'higher for longer' stance has given the NZD a lift.
I also think the reaction is partly due to stretched price action in the pair, which climbed a few big figures in recent weeks.
Market internals were already suggesting some downside risks though.
Below we have the real yield differential for the pair, showing downside risks.
Furthermore, growth differentials (using CESI data) also suggested that spot was getting a bit stretched.
The AUDNZD pair is also susceptible to mean reversion when price strays too far away from the 1.08 level.
I don't think today's RBNZ decision changed the med-term picture that much, but simply provided some room for market internals to see some overdue mean reversion.
If you want more details on the decision check out the always handy posts from Eamonn below:
