The New Zealand dollar jumped the best part of a US cent after the central bank ruled out the likelihood of further rate cuts and said the impact of the coronavirus will be fleeting.

The kiwi was trading at 64.58 US cents at 5pm in Wellington, off the day's high at 64.76 cents, but up from 63.87 cents at the same time yesterday. The trade-weighted index was at 71.59 points from 70.93.

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The Reserve Bank held its official cash rate steady at its record low of 1 per cent, as expected, but forecasts in its monetary policy statement showed the OCR holding steady through to June 2021. Its previous forecast issued in November had implied a likely OCR cut.

"It was obviously quite a hawkish surprise for the markets," said Imre Speizer, currency strategist at Westpac.


"Before the decision, markets had priced in an 80 per cent chance of a cut by September this year. Now that's 35-to-40 per cent," Speizer said.

Even before the OCR decision, the New Zealand dollar had been gaining because of the decelerating rate of new coronavirus cases, and was trading at 64.07 cents just ahead of the decision being announced.

The latest information is that 1,115 people have died from the virus worldwide, with all but two in mainland China, and that the number of those infected has reached 45,169.

The new deaths in China yesterday were 10.2 per cent fewer than the previous day while the number of new infections were 18.6 per cent fewer, according to Chinese health officials.

"What the market looks at is the change in the trend" and last week the number of deaths had been accelerating, Speizer said.

"Most analysts around the world are assuming a short, sharp V-shaped recovery," he said.

RBNZ's assessment of the virus's economic impact in New Zealand is that it will be of short duration.

"We are looking at around a six-week hiatus, disruption. The working assumption is that travel bans are lifted and there is some re-normalisation over the month of March, with some lingering effects," RBNZ governor Adrian Orr said at a press conference.


The New Zealand dollar was at 95.99 Australian cents from 95.19 cents at 5pm yesterday. It was at 49.84 British pence from 49.45, at 59.17 euro cents from 58.52, at 70.93 yen from 70.18 and at 4.4962 Chinese yuan from 4.4573.

Interest rates also rose sharply, with the two-year swap rate climbing to a bid price of 1.1550 per cent from 1.0625 yesterday while 10-year swaps rose to 1.5050 per cent from 1.4000.