NZD/USD is up a touch but is still below 0.60. Economists at ANZ Bank analyze Kiwi’s outlook.
Fed to continue its higher for longer narrative
It will be about which way the pendulum is swinging on the soft-landing debate, and whether markets think the Fed can get away with fine-tuning or will have to bring out the ‘hammer’ again.
The consensus is that they’ll signal one more hike but may not deliver it, with the outcome data dependent. Markets like that vibe, but any deviation from that will impact US bonds, and by extension the USD.
Locally, the 4.6% rise in WMP at the GDT auction was a relief and may give markets confidence that NZD downside is limited, even if there isn’t a compelling reason for it to go higher (without USD weakness).
