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SYDNEY, July 14 (Reuters) - The New Zealand dollar jumped on Wednesday when the country’s central bank struck a surprisingly hawkish note by halting its bond buying stimulus programme, spurring speculation it might raise interest rates before the year is out.
The kiwi climbed 1% to $0.7017 after the Reserve Bank of New Zealand ended its monetary policy meeting by saying the strength of the economy meant the current level of stimulus could be reduced.
As a result, it decided to cease buying bonds by July 23, well ahead of what most analysts had assumed.
Market reaction was swift, with yields on two-year bonds surging 9 basis points to its high for this year at 1.668%. Investors had already been wagering a hike could come as early as November given strength in consumer demand, house prices and inflation.
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