By Swati Pandey
SYDNEY, May 10 (Reuters) - The New Zealand dollar hit a five-month low on Thursday as the country's central bank wrongfooted hawks by keeping interest rates steady and saying the next move might be a cut or a hike.
The kiwi dollar NZD=D4 went as deep as $0.6934, a level not seen since early December, after the Reserve Bank of New Zealand (RBNZ) held rates at a record low 1.75 percent and trimmed its inflation forecasts a little. direction of our next move is equally balanced, up or down. Only time and events will tell," Governor Adrian Orr said in a statement accompanying his first monetary policy decision since he took the helm in March.
Westpac economist Imre Speizer said the new line "is a slightly dovish development."
The decision was closely watched as economists and investors sought to discern how Orr would handle a new policy goal of "maximising sustainable employment" alongside traditional inflation targeting.
The kiwi was last down 0.7 percent at $0.6942.
"Given the style of this (statement) is quite different to previous missives, it will take much longer than usual to divine the key signals," Speizer added. "That said, our initial impression is that it reads slightly more dovishly than February's."
New Zealand government bonds 0#NZTSY= rose, sending yields down 2.5 basis points at the long-end and 2-3 basis points at the short-end of the curve.
The Australian dollar AUD=D4 was unchanged at $0.7460 after two straight sessions of losses. It went as low as $0.7413 on Wednesday, a level last visited in June 2017.
The Aussie has been on a slippery slope since late April largely due to a surge in the greenback as U.S. economic indicators outpaced much of the advanced world and forced traders to unwind short-dollar positions. .DXY
Australian government bond futures slipped, with the three-year bond contract YTTc1 off 1.5 ticks at 97.775. The 10-year contract YTCc1 slipped 2 ticks to 97.1850.