US Holiday conditions Monday affected flow, the New Zealand Dollar (NZD) bumping to 0.6560 areas before retreating towards 0.6480. We have seen a wave of equity buying of late propping up the kiwi, but recent reversals have seen the kiwi on the backfoot over the past few hours. The hawkish tone we have seen of late in Fed rate forecasts have propped up risk but with recent first quarter GDP down -1.5% vs -1.3% worse than predicted there has seen a rethink from the Fed. Earlier numbers of where the interest rate might sit at year end were around 2.75%- 3.0% but this has been pared back to 2.5% – 2.75%. It’s certainly shaping up to be fascinating viewing with the Fed stuck between a rock and a hard place on monetary policy with forecasts of a recession looming. The NZ House Price Index (HPI) fell another 0.8% in May following a 0.9% in April making it the biggest 3 month fall since 2010 when markets were still recovering from the GFC.
Current Level: 0.6527
Last Weeks Range: 0.6414-0.6547