The New Zealand dollar fell 1.3% against the U.S. and Australian dollars and more than 1% against the British pound, Japanese yen and euro after the central bank’s unexpected decision. The Reserve Bank of New Zealand’s Monetary Policy Committee kept its key interest rate at 2.75% by a slim four-to-three majority, despite markets and economists polled by Reuters being almost certain of a hike. Annual inflation reached 3.7% in the third quarter, down from 4.1% in the previous quarter, while energy-market disruptions linked to global shocks put upward pressure on prices. Markets reduced the probability of a 25-basis-point rate hike in December to 40.8%, from nearly 75% only hours earlier, and New Zealand government bond yields declined.
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