NZD/USD continues its gradual recovery. Economists at ANZ Bank analyze Kiwi’s outlook.
At least it is not bad news for the Kiwi
Moves have been unremarkable and it’s well within familiar ranges, and as we look ahead it’s difficult to see a catalyst for a major range-break.
On the one hand, the Fed’s pursuit of soft-landing bodes well for the USD, but on the other hand, the NZ economy is proving to be a bit more robust than first thought, and domestic data this month fully underscores the need for more monetary policy tightening.
Boil it all together and it has more of a feel of limiting downside rather than something that might overcome USD exceptionalism, especially with markets reluctant to price in a November OCR hike. But at least it’s not bad news for the Kiwi!
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