Economists at Westpac sees a glimmer of upside potential on the NZD/USD pair to test 0.6680. Nevertheless, the kiwi trades on the back foot, losing -0.33% on the day to 0.6635 as of writing.
“NZD/USD remains resilient, indeed it exhibits slight upward momentum with a break above 0.6680 possible today. That resilience, relative to other risky currencies, can be explained by NZ’s economic data pulse, with this week’s strong housing data and Fonterra milk price upgrade notable examples.”
“The multi-week outlook remains positive, with potential to rise towards 0.6800 – the top of a multi-month range. Medium supports include elevated global risk sentiment, a weak USD trend, and NZ economic outperformance.”
“The main medium-term negative is the dovish Reserve Bank of New Zealand (RBNZ), but we note that NZ-US yield spreads have weakened in influence this year.”