NZD Strongest Performing of G10 Currencies After RBNZ Leaves OCR Unchanged

. 2 min read

The AUDUSD opens at 0.6833 (mid-rate) and the NZDUSD opens at 0.6405 (mid-rate) this morning.

The NZD is the strongest performing of the G10 currencies after RBNZ Gov Adrian Orr, for the second time in his short tenure, took markets by surprise, this time announcing the OCR would remain unchanged at 1.0%.

The market was short going into yesterday’s announcement with both economists and investors expecting a 25 basis point cut to the rate following Tuesday’s inflation expectations survey. The NZD spiked higher as investors scrambled to cover their short positions and has managed to hold onto its gains, up circa 1.25% against its rivals. During the press conference that followed Mr Orr said they are prepared to add “further stimulus if needed” but rate-setters saw "no urgency to act" as the policy remained "very stimulatory".

The AUD has once again lacked direction with investors waiting for this morning's employment report for direction.

Current expectations for Australia's employment report this morning are for the unemployment rate to remain at 5.2% while job numbers are expected to increase by 16.2k.

Earlier this morning the US labour department reported consumer prices increased marginally more than expected in October. The data showed the index rose by 0.4%, largely due to energy prices which spiked 2.7% following a 1.4% fall in September. Economists had expected consumer prices to increase by 0.3%.

Global equity markets are mixed - Dow +0.25%, S&P 500 +0.16%, FTSE -0.19%, DAX -0.40%, CAC -0.21%, Nikkei -0.85%, Shanghai -0.33%

Gold prices are up 0.6% trading at a new 3-mth low of $1,461 an ounce. WTI Crude Oil prices are inching higher, up 0.8% to $57.39 a barrel.

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