The New Zealand dollar dropped sharply after the Reserve Bank today opted to leave its official cash rate unchanged at 2.5 per cent.
The Kiwi fell from US82.63c before the release to US81.82c soon after.
By 9.45 am it had recovered some ground to trade at US82c.
"Financial markets went into the statement pricing roughly a 30 per cent risk of a hike today,'' Westpac said in a commentary. With that risk now removed, the bank said the currency's reaction was not surprising.
Westpac economists said the Reserve Bank's statement was slightly less hawkish than the market had expected.
