NZD/USD to find support cyclical momentum and earlier OCR hikes – ANZ

The kiwi is lower as risk appetite takes a breather. Nevertheless, economists at ANZ Bank think NZD/USD will ultimately find support from cyclical momentum and earlier OCR hikes.

If risk-off mood persists, more NZD weakness is on the cards

“The kiwi has been compromised by the generalised softening in global risk appetite that has seen equities retreat from highs and US bond yields sink to 5-month lows. But it was not a USD move, and more isolated to commodity currencies, and in particular AUD and NZD, with the former under pressure as the COVID-19 outbreak grows and the RBA reiterates its on-hold and cautious stance.” 

“If the risk-off mood is sustained, more weakness is on the cards, but US equities and bond yields are already up off lows, and ultimately we think the NZD will find support from cyclical economic momentum and earlier OCR hikes.”

“Support 0.6900/0.6940 Resistance 0.7100/0.7230”