NZD/USD dumps towards 0.7200 on RBNZ unchanged, no jawboning

• NZD/USD dumps o RBNZ on hold at 1.75%
• NZD/USD eyes a break of the 0.7200 for 1.7130 target.

Yesterday, the Kiwi was better bid on the back of the GDT Price Index that was +5.9% and with WMP up +7.6%  allowing for a close around 0.7315. The jobs data has propelled the bird to challenge the 10-D SMA and Kiwi opened 1% higher in European trade at 0.7340 after gapping from 0.7300 to 0.7352.

However, the bird was drifting lower as traders assessed the details of the data overnight and concluded that NZ wage growth remained weak despite jobs growth ahead of the RBNZ who will thus be presumed to remains sidelined in today's meeting. The 21-D MA was broken in London trade today and a subsequent push for 0.7250 was made by the bears on dollar strength with the DXY rising towards the psychological 90.00 level that was eventually achieved as NY got going to a high of 90.40. 

RBNZ details and price action

With the RBNZ unchanged and expecting that the bird will ease in time ahead, the bird has subsequently dropped to concern stops around the 0.72 mark and at the time of writing, the bird is trading at 0.7220, down -1.11% on the day, having posted a daily high at 0.7353 and low at 0.7210.

Sees OCR at 1.8% in March 2019 (prev 1.8%)

• Sees OCR at 1.9% in june 2019 (prev 1.9%).
• Sees OCR at 2.3% in March 2021.
• Sees TWI NZD at around 74.8% in March 2019 (prev 73.5%).
• Sees Annual CPI 1.7% by March 2019 (prev 2.0%).

 RBNZ: Mon/pol to remain accommodative for a considerable period

• Numerous uncertainties remain, mon/pol may need to adjust accordingly.
• L-term inflation expectations remain well anchored at around 2%.
• Future headline infl. Expected to tend upwards towards midpoint of target band.
• House prices inflation has increased somewhat, housing credit growth continues to moderate.
• Revised down net impact of new govt policies in s-term.
• Kiwibuild program contributes to residential investment growth from 2019.
• Labour mkt conditions continue to tighten.
• GDP growth in H2 expected to strengthen.
• Economic growth profile weaker in s-term, stronger in m/term.

NZD/USD levels

NZD/USD lost the support of 0.7300 that was set in place during the European session and has since fallen with a strong greenback down to 0.7247 the low so far having been as high as  0.7352 after yesterday's strong NZ jobs data. 0.7200 was a previous support that if broken opens 0.7130 and 0.7070/80 (100 hourly SMA).