{"id":437415,"date":"2026-09-03T03:55:13","date_gmt":"2026-09-02T20:55:13","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/nzd-usd-fell-post-rbnz-0-5890-and-0-5840-now-the-levels-to-watch-437415\/"},"modified":"2026-09-03T03:55:13","modified_gmt":"2026-09-02T20:55:13","slug":"nzd-usd-fell-post-rbnz-0-5890-and-0-5840-now-the-levels-to-watch","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/nzd-usd-fell-post-rbnz-0-5890-and-0-5840-now-the-levels-to-watch-437415\/","title":{"rendered":"NZD\/USD fell post RBNZ, 0.5890 and 0.5840 now the levels to watch"},"content":{"rendered":"<div>\n<p dir=\"ltr\">The comments reinforce rather than reverse the market&#8217;s initial read of Wednesday&#8217;s decision. NZD had already sold off sharply despite the 25bp hike to 2.75%, as traders judged the RBNZ&#8217;s gradual OCR track too tame relative to pricing for further tightening. Breman&#8217;s remarks that the Bank can now take time to assess the impact of the two back to back hikes confirm that a pause is live, which should keep NZD offered against both AUD and USD in the near term. Her warning on inflation expectations getting out of hand offers some two way risk, but markets are likely to treat it as a standard hawkish caveat rather than a signal of imminent action. AUD\/NZD remains the cleanest expression of the divergence, having already pushed to its highest level since July 8 on the back of a strong Australian GDP print.<\/p>\n<p dir=\"ltr\">&#8212;<\/p>\n<p dir=\"ltr\">Yesterday the RBNZ hiked rates:<\/p>\n<ul>\n<li><a href=\"https:\/\/investinglive.com\/central-banks\/rbnz-lifts-ocr-to-2-75-says-gradual-tightening-reduces-risk-of-bigger-hikes-later\" target=\"_blank\" rel=\"follow\">RBNZ lifts OCR to 2.75%, says gradual tightening reduces risk of bigger hikes later<\/a><\/li>\n<li><a href=\"https:\/\/investinglive.com\/central-banks\/rbnz-chief-says-rate-settings-still-accommodative-despite-hikes\" target=\"_blank\" rel=\"follow\">RBNZ chief says rate settings still accommodative despite hikes<\/a><\/li>\n<\/ul>\n<p dir=\"ltr\">&#8212;<\/p>\n<p dir=\"ltr\">\nBreman signals a pause to assess, but keeps an inflation expectations warning in reserve, leaving NZD guidance more measured than markets wanted.<\/p>\n<p dir=\"ltr\">Summary:<\/p>\n<ul dir=\"ltr\">\n<li>Breman says gradual removal of monetary stimulus remains appropriate to return inflation to target while still supporting growth and employment.<\/li>\n<li>She expects growth to strengthen over the coming year and better labour market outcomes to follow.<\/li>\n<li>Breman flags indirect impacts from higher oil prices coming through in coming quarters, and now sees more risk of these effects than previously thought.<\/li>\n<li>Core inflation is expected to keep increasing somewhat over coming months.<\/li>\n<li>Export led growth is starting to spread to other parts of the economy, in what Breman describes as an uneven recovery expected to broaden.<\/li>\n<li>After two OCR increases, the Bank can probably take time to assess how policy has affected the economy.<\/li>\n<li>Breman warns there is a real risk that without a monetary policy response, inflation expectations could get out of hand.<\/li>\n<li>Chief Economist Conway says conditions are challenging in Auckland, with quite extreme regional differences across New Zealand.<\/li>\n<\/ul>\n<p dir=\"ltr\">\nReserve Bank of New Zealand Governor Anna Breman and Chief Economist Carl Conway used post decision remarks on Wednesday to further flesh out the thinking behind the Bank&#8217;s second consecutive rate hike, a move that lifted the Official Cash Rate to 2.75% but failed to lift the New Zealand dollar.<\/p>\n<p dir=\"ltr\">The hike itself had been fully priced by markets, so the currency&#8217;s reaction hinged on guidance, and NZD sold off sharply as traders read the accompanying OCR track as too gradual relative to expectations for a faster tightening path. Breman&#8217;s comments on Wednesday afternoon did little to alter that framing. She said gradual removal of monetary stimulus remained the appropriate setting to return inflation to target while still supporting growth and employment, language consistent with the Bank&#8217;s earlier characterisation of hawkish action paired with a more patient reaction function.<\/p>\n<p dir=\"ltr\">Breman struck a broadly constructive tone on the growth outlook, saying she expected activity to strengthen over the coming year alongside better labour market outcomes. She pointed to early signs that export led growth is beginning to spread into other parts of the economy, describing the recovery as uneven but one the Bank expects to broaden over time. That framing supports the case for the RBNZ stepping back from meeting by meeting hikes, with Breman noting that after two OCR increases in a row, the committee can probably take some time to assess how the tightening delivered so far is flowing through the economy.<\/p>\n<p dir=\"ltr\">The inflation side of the message carried more nuance. Breman said core inflation is expected to keep increasing somewhat in coming months, and flagged that ongoing high fuel prices mean the risk of indirect effects on inflation is now larger than the Bank had previously thought, a reference to the current run up in oil prices. She was explicit that the Bank sees a real risk that inflation expectations could become unanchored if monetary policy fails to respond, a line that keeps the door open to further action even as the near term signal points to a pause.<\/p>\n<p dir=\"ltr\">Chief Economist Conway added a domestic economic texture to the briefing, noting that conditions remain challenging in Auckland and that regional differences across New Zealand are quite extreme, underlining the uneven nature of the recovery Breman described. Together, the remarks suggest the RBNZ is comfortable holding at current settings for now, while reserving the option to respond again should oil driven inflation pressures or unanchored expectations force its hand.<\/p>\n<p dir=\"ltr\">\n<p dir=\"ltr\">Reserve Bank of New Zealand Governor Breman\u00a0<\/p>\n<p>                            This article was written by Eamonn Sheridan at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The comments reinforce rather than reverse the market&#8217;s initial read of Wednesday&#8217;s decision. NZD had already sold off sharply despite the 25bp hike to 2.75%, as traders judged the RBNZ&#8217;s gradual OCR&hellip;<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-437415","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/437415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=437415"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/437415\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=437415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=437415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=437415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}