Orr told Bloomberg TV in Wyoming that the RBNZ's cut to 1% on Aug. 7 allowed the bank to get ahead of any economic slowdown and reduced the probability of having to do a lot more later. "So we're pleased with where we are," Orr said.
Markets currently imply a 20% chance of an easing on Sept. 25, though a move to 0.75% is fully priced in by February next year. Domestic data out on Friday showed retail sales rose a slight 0.2% in real terms in the second quarter, pointing to subdued consumer spending and economic growth in the quarter.
The kiwi had hit its lowest since early 2016 at $0.6362 overnight, partly due to hawkish comments from two Federal Reserve policy makers that lifted the US dollar. The Australian dollar had also slipped overnight but caught a slight updraft from the rally in the kiwi. It was last at $0.6760, just above major chart support at $0.6735. New Zealand government bonds dipped in the wake of the Orr comments, lifting yields around 2 basis points across the curve. Australian government bond futures also eased, with the three-year bond contract off 3 ticks at 99.300. The 10-year contract fell 5 ticks to 99.0350.