FX Update: The New Zealand dollar surged by over 1%
FX Update: The New Zealand dollar surged by over 1% against the dollar and other currencies after the RBNZ surprised markets by refraining from cutting interest rates following its policy meeting today. NZ money market futures had been implying odds of 75% for the central bank to cut the benchmark rate to a new record low of 0.75%, which was instead left at 1.00%. The central bank said that after two cuts this year there was no urgency to cut again. NZD-USD belted up from levels near 0.6330 to an eight-day high of 0.6418, while AUD-NZD plummeted to three-week lows. Ranges among the other main currencies have been comparatively narrow, though not without some movement amid a risk-cautious sentiment in markets after President Trump disappointed expectations at his speech at the Economic Club of New York yesterday, leaving markets with a sense that the U.S. and China are continuing to struggle to finalized their partial "phase 1" deal. USD-JPY lifted to the lower 109.0s after printing a six-day low during the early part of Tokyo trading, at 108.87. EUR-JPY similarly rose after hitting a one-month low, at 119.86, as did AUD-JPY, after the cross saw a 12-day low. The lows reflected safe-haven positioning into the yen. EUR-USD settled to narrow range trading in the lower 1.1000s, above the one-month seen just ahead of the London interbank closing yesterday at 1.1002. USD-CAD has remained buoyant after posting a one-month peak at 1.3257 yesterday. The high extended the pronounced gains the pairing has seen since the release of Canada's October employment report last Friday, which disappointed and caused a reappraisal in BoC monetary policy expectations. AUD-USD edged out a 16-day low, at 0.6830. The pound continued to hold comparatively steady.