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Thomson Reuters
Jun 12 - 07:24 AM
NZD/USD - COMMENT-Higher USD Yield, RBNZ To Sap NZD/USD Strength
First appeared on eFXplus on Jun 12 - 05:20 AM

With U.S. interest rates about to become the highest of all in developed markets and risk appetite underpinned by the U.S.-North Korea agreement nL4N1TD4MR, the dollar is looking an attractive buy especially against the New Zeland dollar.
A potentially dovish RBNZ at the end of the month and the fact that speculators are short of the greenback versus the kiwi may makes this the best dollar long play.
This week the Fed Funds target is expected to rise to 2%, making the dollar's yield the highest within developed FX markets and with stocks holding their long-term uptrends and vols in FX majors low, that big carry is going to attract a lot of demand.
On the flip side, the new RBNZ Governor Orr struck a dovish tone at his first meeting on May 10 nL3N1SG6U7 and with NZD/USD around 1% stronger than it was on May 10, the RBNZ is almost certainly going to repeat that dovish view on June 27.
The 55-DMA at 0.7089 and daily Ichimoku cloud 0.7100-0.7175 provide strong resistance to sell against.

Thomson Reuters IFR Markets


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