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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
NZD/USD rose ~1% yesterday in the wake of a strong Chinese PMI print, however further gains may be constrained, as the currency still looks elevated relative to rate differentials.
- NZD/USD found support below $0.62 in recent dealing, but has generally been tracking lower since early Feb, when yield differentials moved against the currency post the US payrolls report.
- 2-Year Rate Differentials sit +30bps, widening a touch this morning, but we aren't too far off recent lows.
- A break sub +20bps may be a catalyst for a fresh NZD pullback, although the recent narrowing in the swap spread of ~20bps didn't weigh materially on the Kiwi, as the better China data outweighed.
- For NZD/USD, bulls now target high from Feb 14 ($0.6390), a break through there opens 2023 highs at ($0.6538). Bears target low from Feb 27 ($0.6131).
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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