Following the RBNZ monetary policy meeting when it decided to keep interest rates steady, the New Zealand dollar has surged by 1% against the US dollar on the less dovish than expected stance of the central bank. At the time of writing, NZD/USD is trading just above 0.64.

The RBNZ’s interest rate decision came as a surprise as markets were widely expecting another rate cut announcement. Futures markets had pegged the likelihood of a rate cut at over 75% on account of weakening spending and global trade tensions weighing on the trade-reliant NZ economy.

The RBNZ stated that its decision to ease the monetary policy aggressively earlier this year had kept the economy at a good place, but it has not discounted the possibility of turning dovish in the near future. According to Governor Orr, the decision to keep interest rates steady was a unanimous one, further strengthening the appeal of the NZD.