Asia Recap: RBNZ cuts Kiwi's tiny wings by confirming intervention

FXStreet (Bali) - The Kiwi was the worst performer in Asia, as the RBNZ confirmed, through their August's FX transaction, that they had indeed intervened in the foreign exchange market selling more than 500m worth of NZD, the largest sum since July 2007.

NZD/USD fell as low as 0.7706 after market participants were caught by surprise after we learnt that the RBNZ sold 521 million NZD in August, with a late recovery taking the rate at 0.7750 now. AUD/USD was also pressured from the get-go, being quoted as cheap as 0.8694 before stabilizing around 0.87 round number. USD/JPY traded quiet near highs, and so did EUR/USD and GBP/USD, near lows.

Adding fuel to the bearish case, New Zealand's Prime Minister Mr. Key crossed the wires before the RBNZ FX transaction data was published, noting that the fair level for NZD/USD is around 65 cents, adding that he agrees with the RBNZ in that the domestic currency is over-valued, while also noting that any sort of intervention to push the NZD lower "would be logical."

Main headlines in Asia

Catalonia's President signs decree calling for independence referendum

NZ PM Key: Fair Kiwi value around 65 cents

RBNZ intervened quite aggressively in August

RBNZ confirms willingness to intervene - Westpac

RBNZ ready to lean into NZD over strength - ANZ