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ANZ: A More Neutral Near-Term Outlook

KIWI

ANZ note that "the last few days has been all about the USD's rebound off lows amid month-end rebalancing, stronger-than-expected US manufacturing data, and a continued rise in virus cases. At this juncture, the question markets have to decide is: is this just a correction or is the USD making a proper come-back? Better manufacturing and strong equity markets are decent supports if it drives fresh investment. But going against that we have virus cases still rising rapidly, abundant liquidity (which tends to benefit riskier currencies) and rebounding commodity prices. Geopolitics is a risk but the USD rebound looks more temporary. However, with the RBNZ set to strike a dovish tone next week that will limit NZD upside too, suggesting a more neutral near-term outlook."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com
MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com

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