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NZD/USD Sits Just Above Recent Lows, Tracking At 0.6050

NZD

NZD/USD sits back at 0.6050 currently, little change versus NY closing levels from Friday. Early morning highs came in just above 0.6070, as US leaders announced a tentative debt deal over the weekend, although it still has to pass both parts of the US congress ahead of the Treasury running out of cash.

  • NZD/USD lost 0.20% for Friday's session, unable to test back above 0.6100, while lows were around 0.6030/35 region. The currency was off 3.7% last week, amid the RBNZ peak rates call and rising US Fed tightening expectations.
  • From recent highs the 2yr NZ-US swap spread differential has widened over 60bps, last near +66bps (recent highs come in above +125bps).
  • Elsewhere in the cross asset space, equity sentiment was much better on Friday, with US and EU stocks up comfortably over 1%. This didn't impart much positivity for NZD though. Likewise for higher aggregate commodity indices. This likely weighed on NZD relative to AUD, with the AUD/NZD cross now back close to 1.0800 (last 1.0775/80).
  • The NZ data calendar is quiet today, which will leave focus on broader risk appetite post the debt ceiling news as a key driver for NZD.

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