NZD: Path higher will not be an easy one - ANZ

In view of analysts at ANZ, the kiwi is now a decent way away from its cycle lows, and in many ways that is justified as RBNZ rate cuts are priced out and the curve steepens.

Key Quotes

“While positioning will have exacerbated the move, extreme shorts have started to be pared back. In fact, kiwi has run into some reasonable resistance up near 68 US cents suggesting the path higher from here will not be an easy one. That said, global forces hold the upper hand and much will hinge on risk appetites.”

“Further improvement can’t be ruled out, but there are a number of things that warrant caution, not least the softer global growth picture, tightening liquidity, and the fragile political landscape. Together with weaker export prices and our still wary domestic view, we are happy to retain a bearish medium-term bias for kiwi.”