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- NZD/USD: Potential to test the 0.7215 resistance – ANZ
NZD/USD: Potential to test the 0.7215 resistance – ANZ
The kiwi gained as the US dollar lost ground, even as Fed speakers echoed a more upbeat tone and US bond yields rose. Economists at ANZ expect the NZD to enjoy the tailwind of rate hikes expected from the Reserve Bank of New Zeland (RBNZ).
Treasury yields rose across the curve following hawkish commentary from a range of Fed speakers
“The softer USD saw the Kiwi strengthen overnight, leaving it hovering just below 0.7170. That was despite a generally more upbeat tone from Fed speakers, which would ordinarily be a positive for the US dollar. It also coincided with (an albeit small) rise in US bond yields, and continues what has been several days of haphazard and arguably illogical trading in markets in the wake of last week’s Fed statement.”
“Short end interest rate markets here remain buoyant, with 66bps of hikes priced in over the next two meetings. That’s helping the NZD. If the RBNZ is of a mind to hike by 50bps, now’s the time, but that still seems incongruous with the uncertain global backdrop and cautious tone of other central banks. Still, until we know the outcome, markets will price in the risk.”
“Support 0.6860/0.6900 – Resistance 0.7215/0.7310”
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