RBNZ Hiking Finished The New Zealand Dollar is falling sharply today on the back of the latest RBNZ meeting overnight. Despite the central bank hiking rates by a further .25%, the sell-off emerged as governor Orr signalled no further hikes were likely near-term. Notably, some policy makers had been in favour of holding rates unchanged this time around, marking the first time there has been dissent within an RBNZ vote.With the OCR now at the target level issued by the bank when it began tightening, the RBNZ is essentially declaring job done for now. In terms of market expectations, pricing now suggests rate cuts will come from Q3 onwards.Lagged Policy Impact Explaining the decision, the RBNZ noted that it was confident that its recent 525 basis points worth of tightening would continue to feed through into the economy going forward, bringing CPI down to target. In terms of forecasts, it now projects CPI to be back in its target band by Q3 next year. In terms of growth, the RBNZ is now forecasting a milder slow down than it was projecting previously, now forecasting a dip of just -0.2% from -0.5% prior.Technical ViewsNZDUSDThe sell off in NZDUSD has seen the pair breaking down sharply through .6210 as the reversal lower from .6385 gathers pace. Price is now fast approaching a test of the .6092 region. This is a key support level and if broken, there is room for a much deeper drop towards the .5827 level below.
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