Reserve Bank of New Zealand Governor Adrian Orr on Wednesday said that there are capacity pressures everywhere in the country. Orr added that the economy is running above its potential and that rate hikes would slow the desire to buy houses. 

Market Reaction

NZD has not seen a reaction to the latest comments from the RBNZ governor. It is widely known that the New Zealand economy is running hot right now and that the RBNZ on course to reduce monetary stimulus over the coming years.

NZD/USD was sent tumbling during Wednesday's Asia Pacific session after the RBNZ delivered a more dovish than expected 25bps rate hike. The bank's guidance on the future path of rate hikes was not as hawkish as money markets had been expecting.