Imre Speizer, analyst at Westpac explained that the positive reversal in global risk sentiment in mid-Fed accelerated last week, pushing most equity and commodity markets higher. As a result, high-yielding risky currencies have outperformed.
Key Quotes:
“NZD/USD broke above its month-old range of 0.6550-0.6750 last Friday, implying a target of 0.6900 this week. The main story here is a sharp rebound in global risk appetite has boosted demand for risky currencies such as the NZD (although AUD, CAD and emerging market currencies have done even better).
Against such a backdrop, the RBNZ would need to deliver an OCR cut on Thursday to send the NZD significantly lower. Otherwise we expect the NZD will remain elevated, with a risk of a large rise if the RBNZ’s tone is not sufficiently dovish.”
“The RBNZ MPS will dominate the NZ calendar, but for the record, there is Q4 manufacturing (Tue), electronic spending (Wed), and manufacturing PMI and food prices (Fri).”
(Market News Provided by FXstreet)