NZD/USD is bid as Tokyo gets going, up to meet and challenge the bears protecting the recent highs of 0.7330 and 0.7337.
With s[ot at 0.7323 and a high of 0.7327, that area could be beaten today as markets get behind the notion that the NZ economy is performing well and in the absence of political uncertainties, the kiwi and its yield is attractive to investors. Last week’s nonfarm payrolls, while looking good on the outside, behind the data was a little concerning and leaves a mixed picture going forward for the Fed and markets to contend with. Meanwhile, we have the RBNZ coming up this week, but given the solid performance of the economy and daily prices, the RBNZ is not expected to act.
Analysts at Westpac note that the momentum remains positive, targeting the 0.7400 area next (Nov high) if it can clear 0.7350.
NZD/USD 1-3 month:
The analysts at Westpac project that for the month ahead, we could see NZD/USD extending beyond 0.7500 (Sep high) if the US dollar continues to register disappointment in the Trump Administration’s policies. “Further ahead, though, the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD lower to 0.7000. Granted, the NZ economy is strong and dairy prices have risen, but these forces are subservient to the US dollar’s trend. (1 Feb)”
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