A good jobs report for 1Q in New Zealand continued to underpin the rather solid domestic economic story which continues to provide some support to NZD. Economists at ING expect the NZD/USD to extend its rise and move into the 0.73 neighbourhood.
Domestic economic story remains strong
“Markets are inevitably starting to question how long the Reserve Bank of New Zealand will be able to stick to its dovish tone given the data improvement, and we could indeed start to see a re-emergence of tightening expectations.”
“Calendar in New Zealand is very light, with some focus only on Finance Minister Robertson’s pre-budget speech (the budget will be announced on 20 May) and some housing data. The latter are set to be increasingly monitored after April’s house data showed that the Government’s measures to curb the housing bubble have not had the desired effect yet.”
“NZD/USD should move back above the late April highs, and possibly advance into the 0.73 region.”
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