- The Federal Reserve is on a lower path for a longer path which sank the greenback, lifting the bird.
- The RBNZ is expected to decide on a negative interest rate regime, but the bird is firm in all areas.
The NZD / USD is currently trading at 0.6733 and between a low of 0.6727 and a high of 0.6741 in a relatively volatile start to the end of the month.
Prior to the weekend, the USD declines were fading into the mid-low of the 92 handle in the DXY following the aftermath of Jackson Hole, which helped raise the bird to de new heights of the COVID-19 era.
Given that the high nominal and real dollar rates were key ingredients of the dollar’s strength in previous years, it is not a good idea for the Federal Reserve to receive the prospect of interest rate hikes on the horizon. bodes well for the greenback.
However, the bird also made decent gains on most crosses and all despite the likely outcome that the Reserve Bank of New Zealand will cut rates to negative.
New Zealand can hardly afford a higher exchange rate, but as we noted on Friday, the Fed’s new policy target somewhat neutralizes the threat of negative rates from the RBNZ, and we may have to live with a little longer,
ANZ Bank analysts have argued that have noted the price action is bullish and suggest the next target as the Jan. 1 high of 0.6756.
Meanwhile, on the coronavirus updates, Auckland has officially moved up to level 2 but still has more restrictions in place than the rest of the country, hence the reason it is referred to as level 2.5.