Breaking: RBNZ hikes by 25bps, NZD/USD attempts to break 0.6750

The Reserve Bank of New Zealand met market expectations on Wednesday by lifting the cash rate by 25bps.

Of most interest for the market in the statement and press conference will be the Bank's forecast OCR track and details regarding how it plans to run down its LSAP holdings.

more to come...

NZD/USD update

NZD/USD was trapped above old hourly highs acting as support near 0.6730 ahead of the event and has subsequently popped into test the 0.6750 resistance.

The following is a top-down analysis of NZD/USD drawn ahead of the event with an emphasis on the downside from a long-term point of view while below the 0.6770s: 

• NZD/USD Price Analysis: RBNZ in focus, key levels and market structure to watch

Why the RBNZ matters to traders

The Reserve Bank of New Zealand (RBNZ) holds monetary policy meetings seven times a year, announcing their decision on interest rates and the economic assessments that influenced their decision. The central bank offers clues on the economic outlook and future policy path, which are of high relevance for the NZD valuation. Positive economic developments and an upbeat outlook could lead the RBNZ to tighten the policy by hiking interest rates, which tends to be NZD bullish. The policy announcements are usually followed by Governor Adrian Orr’s press conference.