The New Zealand dollar eased after the Reserve Bank kept its official cash rate unchanged at 2.5 per cent and delivered a more balanced message than the market had expected.
Contrary to expectations, there was no mention of macro-prudential tools, such as loan to value ratios - which the bank expects to use to try to take the heat out of the property market.
The currency fell to US79.33c just after the statement's 9 am release from US79.71c just before. By late morning the currency had regained ground US79.50c.
The Kiwi's weakness followed an explosive trading session overnight, which saw the currency rally by 1.3 per cent - making it the strongest performers among its peers.
Sam Tuck, senior manager FX at ANZ New Zealand, said the statement was more even-handed than the market had expected. "There was a thought that maybe they would be a little bit more hawkish - perhaps by raising forecast bank bill track next year - to reflect the better New Zealand data that we have seen," he said.