No hikes from RBNZ isn't a surprise.
RBNZ assistant governor McDermott hit the wires with some jawboning on the currency and a line that the central bank isn't considering hikes. The kiwi took it as an excuse to continue lower but the comments shouldn't be a surprise to the market.
The OIS market is pricing in 25 basis points of cuts in the coming 12 months. Perhaps that could rise but McDermott wasn't promising anything on the dovish side.
NZD/USD daily chart
The New Zealand dollar has been a solid performer this month, although it struggled above 0.7700 over the past week. The danger is intervention from the RBNZ and there is some talk that could be coming.
Barring that, the technicals look decent. The 100-day moving average, along with the 61.8% retracement of the April rally are below. Further down is the modest uptrend since the March low.
The main feature on the chart remains the double bottom at the Feb-March lows. There continues to be a series of higher highs since then and the market cleared the Dec lows.
