NZD/USD: Potential for NZ rates to rise could be a powerful ally over coming weeks – ANZ

FXStreet Insights Team FXStreet

The US Dollar bounced into month end, but the NZD has held up. Economists at ANZ Bank analyze Kiwi’s outlook.

Relative stability in NZD/USD

Kiwi outperformed peers as the USD corrected higher, spurred on by higher US bond yields and month-end wrangling. That has resulted in relative stability for NZD/USD.

With interest rate markets now completely ignoring the RBNZ and instead latching on to the global vibe (despite there being clear differences, which the RBNZ has pointed out), higher local rates aren’t current support for the NZD, but the potential for them to rise (or not fall as fast as US rates) could be a powerful ally over coming weeks if the Fed is dovish and if US yields keep falling.

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