NZD/USD is higher again, capitalising on USD weakness and improved risk appetite into quarter-end. The kiwi closed above 0.66 on Wednesday and was last seen trading near the daily high of 0.6648. Nonetheless, economists at ANZ Bank expect the pair to oscillate around the 0.65 mark in the coming months.
“The Kiwi is stronger on Thursday but this is again as much of a reflection of USD moves as anything NZD specific, with a fair degree of volatility seen on the path higher as FX markets navigated their way through month/quarter-end fixing and rebalancing flows.”
“Local drivers of the NZD are well-known: very easy monetary policy and the promise of more to come, low and flat yield curves, but a gold standard COVID-19 response and commodity prices holding up. Against that, we have election uncertainty in both countries.”
“All told, we expect continued trading around our central forecast of 0.65 for the next few quarters.”