A launching pad was established for the New Zealand dollar to rally. Offshore and local buyers were looking for something with a five in front. |
Any sign of softening will see markets bring forward expectations of rate cuts. Tough talk on interest rates may provide further opportunities to sell New Zealand dollars. |
It is difficult to see the New Zealand dollar stage any kind of sustainable rally. Data is likely to portray softer growth than the Reserve Bank's projections. |
Market pricing has shifted to a September-December start to the easing cycle. The New Zealand dollar should consolidate further. |
The labor market data is expected to record some deterioration. This will keep the New Zealand dollar on the defensive. |
The sticking point for the Reserve Bank is still inflation. It is likely to be September before the bank is comfortable that pressures have dissipated enough. |
The yield differential story is going to continue to be there. The Fed is getting closer to the end of their tightening cycle. |
U.S. dollar weakness will see the New Zealand dollar test higher levels. With the prospect of less support from interest rates, the U.S. dollar fell across the board. |
Yield demand for the New Zealand dollar appears to remain unquenched. |