The New Zealand Dollar (NZD) has fallen to its lowest level since November 2022 after a slump post last week’s RBNZ policy announcement. The kiwi traded down to 0.6032 late last week and sits around 0.6055 this morning. The RBNZ has paused its hiking schedule after raising rates to 5.50%, a 14-year high. Word is it should stay here until mid-2024. We are not sold on the idea of the kiwi entering a downward spiral in the coming months- moves to the topside would represent the positive “carry trade” scenario against the USD. After all, it’s the only mainstream currency which has a higher interest rate than the US at 5.25%. Let’s see what happens. Certainly, with the US debt ceiling negotiations between Biden and McCarthy being agreed this has boosted risk appetite, but not as much as would have thought, making the kiwi undervalued. Later in the week we have US Non-Farm Payroll and the Unemployment rate publishing.
Current Level: 0.6046
Last Weeks Range: 0.6032-0.6301