Choppy moves this week in the New Zealand Dollar (NZD), US Dollar (USD) cross ensured a reasonably directionless week of action with pair trading around the weekly open of 0.6330 this morning. Attempts to push through 0.6400 resistance failed overnight with risk sentiment waning and the kiwi falling back. US bond yields are being closely watched as the 2 year and 10 year diverging to a 45 year range represents a tightening market and an early view of a potential recession. Recent Fed expectations of just one further hike to interest rates looks unlikely as two further increases look possible. Powell did however say deflationary signs are starting to appear with moderate growth predicted for 2023. We are not yet ready to shift our view to bearish just yet. Movement however through 0.6220 may change this. A bounce to 1.0960 in overnight trading suggests the recent move towards 0.9000 (1.11) ran out of steam, however we still support the cross tracking lower.
The current interbank midrate is: NZDUSD 0.6324
The interbank range this week has been: NZDUSD 0.6269- 0.6388