NZD Top Performer, RBNZ Later This Week

NZD had a strong week, up 1.20% against the USD, making it the top performer among all G10 currencies. The kiwi benefited from a robust risk-on move in equities and expectations of a potential rate hike. TD and BNZ were the latest banks to announce their anticipation of the RBNZ raising rates. The focus this week will be on Wednesday when the RBNZ meets to announce the cash rate, expected to remain on hold at 5.50%.

• NZD/USD attempted to trade above 0.6200 post the Asia session on Friday but encountered selling, finishing the week just below at 0.6197. As trading resumes this week, the pair trades at 0.6194. Looking ahead, a pullback is a possibility. Key levels to watch include 0.6173 (highs from Jan 31), and below there, 0.6150/60 (highs from Jan 9/Jan 2), presenting good buying opportunities. To the upside, initial resistance is at 0.6260 (Jan 11 Highs).
• AUDNZD made new yearly lows last week down 0.70% for the past 5 days. The focus this week will be the RBNZ decision, while Australia has retail sales data out on Thursday. Last week the pair hit levels not seen since May 23 of 1.0570 and we trade just above there at the moment, a retest of these levels will open a the lows from May 23 of 1.0560, could signal a move to test the lows from Dec 2022 at 1.0474. However, a pullback after recent performance wouldn't be unexcepted, so level to watch to the upside are 1.0612 highs from Feb 22, above there 1.0650 Feb 20 highs.
• Earlier this morning the NZ Shadow Board members recommended the Reserve Bank keep the Official Cash Rate at 5.5% this week
• There is little on the calendar until the Rate Decision on Wednesday.