Foreign exchange markets never bought into the strong view promulgated by the local bank economists over recent weeks that the RBNZ had to tighten monetary policy immediately and hike the OCR interest rate. In times gone by a sudden shift upwards in the forward pricing for New Zealand’s short-term interest rates would have sent the Kiwi dollar up one or two cents. The panic reaction by the local interest rate markets to higher than expected inflation over the June quarter and the RBNZ not offering any kind of rebuttal to that interest rate market pricing in their last review statement, was not enough to convince the ... (full story)