Forex Flash: RBNZ defies norm, portends mixed signals – UBS

FXstreet.com (Barcelona) - The Reserve Bank of New Zealand kept interest rates unchanged at 2.50%. However, it bucked the global trend by signaling the risks were on the upside now by dropping the phrase 'there are both upside and downside risks' from its statement. The RBNZ still expects interest rates to remain unchanged throughout 2013 as inflation is set 'to remain close to the bottom of the target range this year'.

Ultimately however, 'house price inflation is high', and the RBNZ warned it 'does not want to see financial or price stability compromised'. According to the UBS Research Team, “This suggests the next move in interest rates will be up – we maintain a bearish AUD/NZD trade recommendation, and expect the cross fall into a lower 1.15-1.20 range this year.”