The New Zealand Dollar (NZD) is stronger this morning against the US Dollar (USD) trading around the 0.6350 area boosted by a bounce in equity markets and bond yields. We have seen a good push since the low of 0.6120 in late April but I’m not sure the kiwi has more in it with prices looking overbought and close to resistance levels around 0.6370. Fed’s Jerome Powell has said he is trying to pull a soft US economic landing out of the bag and avoid a recession. Is this possible? no-one knows but with an imminent credit crunch and recent bank failures this will take a toll on the US economy compared to the NZ economy which has a booming labour market which could repel a result nobody wants to see happen. Inflation in the US has been coming down fast of late but may struggle in the medium term to hit the required 2-3% band which could raise chances of a recession. A spurt through 0.6380 levels in this wee rally could be interesting with a possible retest of the yearly high at 0.6535 in sight.
Current Level: 0.6344
Resistance: 0.6500
Support: 0.6100
Last Weeks Range: 0.6160-0.6315