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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
NZD
The greenback consolidated yesterday after the DXY rose ~1% in the aftermath of Fed Chair Powells Congressional testimony on Tuesday. NZD/USD printed its lowest level since mid-November, in the immediate aftermath of Powell's comments, before marginally paring losses yesterday.
- NZD/USD found support below $0.61 but has generally been tracking lower since early February with the move lower extending this week.
- 2-Year Rate Differentials sit +32bps, but we aren't too far off 2023 lows. NZD/USD continues to look elevated relative to 2 Year Swap Spreads. A move in swap spreads below +20bps could open up further downside in NZD/USD.
- For now, bears look to target the low from 11 Nov at $0.5985, a break through here opens 2022 lows at $0.5512. Bulls first look to break $0.62 to turn the tide.
- Tomorrow's NFP print presents the next macro risk event, with Fed Chair Powell flagging it as a key input into the March FOMC meeting.
Fig 1: NZ US 2 year Swap Spreads v NZD/USD Daily Spot
Source: MNI/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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