MUFG Research discusses NZD outlook and maintains a constructive bias over the coming weeks.
"Strong labour market provides more evidence of V-shaped recovery in New Zealand...New Zealand’s success in containing the spread of COVID-19 is allowing their economy to recover more strongly. Real GDP had already exceeded the pre-pandemic peak at the end of Q3 well ahead of other major economies," MUFG notes.
"Positive cyclical momentum is encouraging market participants to continue scaling back expectations for further RBNZ easing. The likelihood of negative rates being implemented has diminished. Overall, we continue to believe that the fundamental backdrop remains favourable for a stronger kiwi," MUFG adds.