"The RBNZ has been saying no thanks to a strong NZD for some time now and ramped up its jawboning efforts in August by dropping the threat of FX intervention into the mix," argues Viraj Patel, Foreign Exchange Strategist at ING.
"Much like the RBA, the central bank acknowledged that a strong currency comes at an external disinflationary cost - which is particularly undesirable at a time when domestic price pressures have also slowed down."
"While the threat of FX intervention remains non-credible - especially as the costs of an RBNZ rate cut in terms of financial stability risks outweigh the benefits at this stage - we think it may be sufficient in containing NZD upside in the near-term. Speculative NZD longs were hovering around five-year highs prior to the RBNZ meeting and there's a good chance positioning will begin to neutralise."
"External factors are also likely to be a limiting factor for the NZD; an uncertain global risk environment and US data-driven recovery in USD sentiment would fuel any NZD/USD correction towards 0.70."
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