NZD/USD ended the trading week back at around 0.59. Economists at ANZ Bank analyze Kiwi’s outlook.
USD exceptionalism remains the broad vibe
Encouraging as the various attempts to regain 0.60 (which wasn’t ever actually achieved) last week were, the USD remains the default play amid challenges facing China and Europe, and markets seem eager to fade NZD strength. That’s understandable with no differentiating story to tell here and with markets attuned to USD exceptionalism.
Worse still, it’s hard to see that changing this week with a Fed pause, which has the potential to underscore the US soft landing vibe, even though there are sceptics aplenty. NZ current account and GDP data this week will be watched, but there’s also a good chance markets gloss over, especially with the Fed and the Bank of Japan both scheduled to meet this week.
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