The NZD/USD pair is off Tuesday’s highs but it is still elevated and continues to benefit from better-than-expected data as the USD weakens, economists at ANZ Bank appraise.
Key quotes
“The Kiwi is off Tuesday’s highs seen in the wake of stronger than expected inflation expectations data, but remains lofty as the broad USD DXY index dips further.”
“It isn’t one-way traffic, but with the NZ yield curve now very steep as NZ 10-20yr bond yields widen on a spread to their US and AU counterparts, and the market thematic still that the NZ economy is doing better and the RBNZ will likely be an earlier ‘hiker’, the path of least resistance remains higher – at least before the MPS on 24 February.”
“Briefly topped 0.7250 on Tuesday; a sustained break would be bullish.”
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