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NZD/USD To Multi Month Lows, NZ-US 2yr Spread Back Sub 0bps

NZD

NZD/USD has hit fresh lows back to the first half of May, last just under 0.6030. 0.6000 is the next round figure point, while earlier May lows printed sub 0.5900. All the key EMAs remain clustered higher, between 0.6080/90.

  • NZD/USD is being weighed by firmer USD trends elsewhere, although note the Kiwi is the weakest link in terms of the G10 FX backdrop (NOK is off by close to the same amount0.
  • NZ-US 2yr swap spreads, are now back sub 0bps, see the chart below. This spread is now back to 2020 levels, first time sub 0bps over this period. Front end US yields have been firmer in early Friday dealings.
  • The AUD/NZD cross is also trending higher, last back above 1.1115. Recent highs in the cross came in at 1.1152. This is likely weighing on NZD as well.

Fig 1: NZD/USD Versus 2yr NZ-US Swap Spread

Source: MNI - Market News/Bloomberg

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