Economists at Westpac see potential for further gains above 0.7000 over the next few days, although the NZD/USD rally is getting stretched.
The NZD/USD rally has been given fresh energy, the Finance Minister’s intervention in the RBNZ’s remit (proposing to include a house price clause) interpreted by the market as potentially lessening the need for further easing. A second probe above 0.7000 during the next day or two is possible.
Multi-month, we expect risk sentiment to remain elevated into year-end, supported by unprecedented global central bank and government stimulus, and the USD to remain in a downtrend. In addition, the NZ economy’s performance since covid has been impressive, providing fundamental support for NZD outperformance.