- RBNZ kept its policy rate unchanged and decided to stop buying additional assets.
- The US dollar index bounced toward 92.50 after Wednesday’s slide.
- The focus shifts to US data, testimony from FOMC Chairman Powell.
After gaining nearly 100 pips on Wednesday, the pair NZD / USD it rose during the Asian session on Thursday, but struggled to preserve its bullish momentum. At time of writing, the pair was down 0.38% on the day at 0.7005.
RBNZ takes a surprising aggressive step
Following its July policy meeting, the Reserve Bank of New Zealand left its policy rate unchanged at 0.25% as expected. However, the bank decided to reduce the current level of stimulation of its policies. “The Reserve Bank will stop additional asset purchases under the Large Scale Asset Purchase (LSAP) program by July 23, 2021,” the RBNZ said in its statement. However, the positive impact of this radical policy change on the NZD remained short-lived.
On the other hand, the US Dollar Index (DXY), which fell sharply following dovish comments from FOMC Chairman Jerome Powell while presenting the Fed’s Semi-Annual Monetary Policy Report, is experiencing a rebound on Thursday. Currently, the DXY is up 0.12 on the day to 92.47, forcing the NZD / USD to remain in negative territory.
Later in the session, data from the New York Empire State Manufacturing Index, initial jobless claims, and industrial production will be put on the U.S. economic agenda. second day of his testimony before Congress.
On Friday, New Zealand’s second-quarter consumer price index (CPI) data will be analyzed for fresh momentum.