Kiwi Moves Higher Alongside AUD

NZD: Kiwi dollar marginally higher on the session, NZD/USD last at 0.7065. In the absence of specific catalysts the pair has moved higher on general risk on sentiment in Asia-Pac, most equity indices indicated higher after US stocks pushed to fresh records, as the optimism behind the November market rally extended into a new month while vaccine hopes also helped support the risk tone.

• NZD is also supported by the move higher in its Antipodean counterpart after strong Australian GDP data. QoQ figures showed the Australian economy grew 3.3% in Q3, above estimates of a 2.5% gain.
• NZD gained 6.3% in November, the most in a month since September 2013, as investors scaled back expectations for more policy easing given the risk of surging house prices.
• In a research note Commonwealth Bank saw headwinds for NZD/USD, they noted the pair is overvalued relative to the level implied by real NZ-US 2-year swap rate differentials and that NZD/USD is undervalued compared to NZ/US terms of trade trend and around equilibrium relative to whole milk powder price.
• RBNZ Governor Orr delivers speech `The Covid pandemic: challenges and opportunities facing central banks' at 0630GMT/1730AEDT