[MARKET ANALYSIS] NZD outperforms following the RBNZ's hawkish hold

DXY: Flat

• DXY trades rangebound following the prior day's mild gains, in which price action was largely driven by geopolitical headlines with Iran warning that it would respond to the US violating the truce. Nonetheless, there haven't been any major fresh developments overnight regarding the Middle East aside from continued launches between Israel and Hezbollah, while the dollar is also contained by the mixed price action in its major counterparts.

EUR/USD: +0.1%

• Remains afloat following yesterday's intraday rebound and as recent ECB rhetoric continued to point to a June rate hike.

GBP/USD: Flat

• Lacks direction following its retreat from the 1.3500 territory and with quiet newsflow from the UK, although there were reports that the UK is poised to unveil a multi-billion-pound package to boost the UK defence industry and armed forces next week, which is expected to be backed by GBP 18bln of government funding.

USD/JPY: Flat

• Takes a breather after advancing back above the 159.00 level, with muted reaction seen in the currency following softer-than-expected Services PPI data and comments from BoJ Governor Ueda, who warned that energy shocks may become more persistent.

Antipodeans: AUD/USD flat / NZD/USD +0.7%

• Saw mixed fortunes with AUD/USD paring its gains after softer-than-expected monthly headline CPI data for April, while NZD/USD outperforms following the RBNZ hawkish hold in which it kept the OCR unchanged for the third consecutive meeting, but stated the OCR will most likely need to increase sooner and by more than envisaged in the February monetary policy statement. RBNZ also raised its OCR projections, in which it now sees the OCR at 2.51% in September 2026, while the decision to pause was a tight (3-3) vote split.