NZD/USD in an even stronger position post RBNZ - Westpac

Imre Speizer, Research Analyst at Westpac, suggests that the NZD/USD is arguably in an even stronger position following the RBNZ’s easing this morning, given how easily it rallied a cent in response.

Key Quotes

“This episode demonstrated that an event will need to be significantly negative to disturb the global market’s love affair with the high yielding currency.

Should it sustain a rise above 0.7325 (July high), then the next major target is not until the 0.7610-40 area (2014 lows coinciding with and 2015 highs).

One way of illustrating the limited influence domestic factors currently have on the NZD is to show NZD/USD diverging markedly from declining NZ-US interest rate spreads in 2016 (across). One explanation is rising risk appetite, the other is demand for high-yielding currencies.”