• The New Zealand Dollar surges higher following the RBNZ policy meeting on Wednesday.
• Although the RBNZ left interest rates unchanged, commentary from Governor Orr suggested the possibility of further rate hikes. 
• NZD/USD pushed to a new peak above 0.6200 following the meeting, extending its short-term uptrend.

The New Zealand Dollar (NZD) trades higher on Wednesday after rallying following the Reserve Bank of New Zealand (RBNZ) meeting in the early hours. Although the RBNZ left the Official Cash Rate unchanged, the Kiwi rose after RBNZ Governor Adrian Orr said he would not rule out further interest rate hikes if inflation remained elevated. The prospect of higher interest rates is bullish for currencies as it attracts higher capital inflows.  

Daily digest market movers: New Zealand Dollar surges after RBNZ meeting

• The New Zealand Dollar rallies after the RBNZ Governor mentions the possibility interest rates could rise even higher in the future, depending on the outlook for inflation. 
• The bank left the Official Cash Rate (OCR) at 5.50% at the meeting, however, as markets had expected. 
• The hawkish tone of press conference after the meeting surprised many investors as New Zealand data – though still elevated – has come out below expectations recently, suggesting, if anything, interest rates are at risk of being cut. 
• Official data from Statistics New Zealand (Stats NZ) showed that the Consumer Price Index (CPI) in the 12 months to September rose 5.6%, lower than expectations of 5.9% and the prior quarter’s reading of 6.0%. On a quarterly basis, New Zealand’s inflation increased to 1.8% but fell short of expectations of 2.0%.
• New Zealand's Unemployment Rate climbed to 3.9% in the September quarter, compared with 3.6% last quarter. 
• The new center right-wing coalition government has plans to change the RBNZ’s dual mandate, which combines maintaining price stability with full employment. They want to scrap the employment part and for the RBNZ to focus on price stability. 
• Preliminary talks between the new government and RBNZ officials were characterized as being “constructive” by Orr, suggesting the bank may be open to changing to a single mandate. 
• Such a move would enable the RBNZ to be more single-minded about bringing inflation down using higher interest rates and regardless of the impact on the economy and labor market, it thus could be viewed as a hawkish development and bullish for NZD.

New Zealand Dollar technical analysis: NZD/USD peaks above 0.6200

NZD/USD – the number of US Dollars that can be bought with one New Zealand Dollar – peaks above 0.6200 after rallying following the RBNZ policy meeting. Although it has pulled back down since, the pair remains in a short and medium-term bullish trend, which continues to bias longs over shorts.