NZD/USD bulls stay in control following hawkish RBNZ

• NZD/USD firmly bid on a hawkish RBNZ and a reassuring Fed. 
• US dollar has been on the backfoot following Fed's Powell. 

NZD/USD is moving into early Asia over 1.3% higher following a rally from a low of 0.6938 to a high of 0.7043, currently trading at 0.7034.

The market was trading higher on the back of the more hawkish-than-expected Reserve Bank of New Zealand meeting from the prior Asian session which sent the Kiwi on a modest rally, breaking structure to the upside.

The RBNZ announced that it will stop purchasing assets under the LSAP programme by next week (23 July).

''In yesterday’s announcement, the RBNZ kept commentary about the timing of any OCR hikes vague, however, they acknowledged stronger data by dropping the comment that reaching its targets would require “considerable time and patience”, which provided a clear nod towards OCR hikes kicking off than earlier envisaged,'' analysts at ANZ Bank said.

''We are now forecasting the RBNZ will lift the OCR by 25bp in August with further lifts to follow. CPI and labour market data should provide the final evidence the RBNZ requires to lift the cash rate.''

Meanwhile, in markets on Wednesday in the US session, The Federal Reserve's chair, Jerome Powell explained to Congress that the US economy was "still a ways off" from levels the central bank wanted to see before tapering its monetary support.

Fed Powell, at the beginning of his two-day testimony to Congress, said the Fed is firm in its belief that current price increases are tied to the economic reopening and are transitory.