Phil Borkin, Research Analyst at ANZ, explains that after its sharp move lower, the NZD has been far more resilient recently and if anything they see some modest upside potential in the near term.
Key Quotes
“Rate dynamics (as opposed to commodity prices) have been explaining a far greater degree of NZD variation of late, and they have turned slightly less NZD negative as Treasury yields have retraced and the market has largely re-priced the RBNZ.”
“Yet we’d caution against expecting a sharp move higher in NZD. Domestic data has turned patchy, commodity prices are expected to flat-line and global uncertainties remain. Ultimately our medium-term views of further NZD weakness are unchanged.”
“Therefore, we’d use any near-term strength as an opportunity to re-initiate short positions.”
Share
