NZD/USD: RBNZ plan for lower and flatter yield curve hits the kiwi – ANZ


The USD has popped higher, helping drive the Kiwi lower as NZGB yields sink below their US counterparts, per ANZ Bank. NZD/USD drops to the 0.6540 region, down 0.1% on a day, amid Friday’s trading. 

Key quotes

“The Kiwi is on a losing streak as the USD recovers and US interest rates firm. That contrasts with the sharp move lower in NZ bond yields yesterday that took most NZGB yields below US equivalents, eradicating the yield premium that once existed here (the NZ/US 10yr spread was around +40 a month ago, it’s now around just below zero).

“Prospects for a lower and flatter yield curve here (or at least lower and flatter than would have otherwise been the case) will likely continue to weigh on the Kiwi.”

“Support 0.6450 Resistance 0.6755”

 

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