- NZD/USD extends losses for the third consecutive day on Wednesday.
- RBNZ, as expected, didn’t move on policy this month
- US Dollar Index steady around 94.00, PMI data in focus.
The NZD/USD hit a day’s high of 0.6646 in the Asian session before rapidly reversing. The pair is now trading -0.65% at a monthly low of 0.6590,
RBNZ hits NZD
The Reserve Bank of New Zealand kept interest rates steady at 0.25%. The quantitative easing program was also untouched at NZD100 billion, as expected. However, the policy statement was more dovish than expected. In its policy statement, the RBNZ indicated that it stands ready to lower the interest rate if necessary, to provide additional stimulus if required. This sparked a NZD selloff.
Despite a two day rally, the US Dollar index is not showing signs of a technical correction. The DXY, hit a two month high at 94.25 on Wednesday and has since eased back to trading flat at 94.00. Looking ahead, , the IHS Markit Manufacturing and Services PMI (September) reports for the US will be released. Recently, the US Dollar has been reacting well to stronger data from the US, With this in mind, a better-than-expected PMI reading could drag on NZD/USD.