- NZD/USD is reporting gains above 0.6330 after RBNZ's rate decision.
- The central bank kept rates unchanged as expected and said more stimulus could be provided, if necessary.
The bid tone around the NZD strengthened, pushing the NZD/USD pair higher from the session low of 0.6304 to 0.6339 after the Reserve Bank of New Zealand (RBNZ) kept the overnight cash rate unchanged at 1.00% as expected.
The RBNZ said that the business confidence remains low and the interest rates could remain low for a longer time. The central bank added that the domestic demand is expected to rise over the next year.
Further, it said that low overnight cash rate levels are needed to ensure inflation increases to the mid-point of the target range, and employment remains around its maximum sustainable level.
While the bank maintained that there is scope for more fiscal and monetary stimulus, if necessary, it refrained from explicitly signaling more rate cuts in the coming months. That said, the policy statement wasn't hawkish. Even so, the NZD has picked up a bid. The Kiwi's reaction indicates the market was positioned for a dovish statement.
As of writing, the NZD/USD pair is trading at 0.6335, representing 0.10% gains on the day.
Looking ahead, the currency pair will likely extend gains, having confirmed a bullish inside bar reversal pattern on Tuesday.
Technical levels
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