Another big day in US equities took the New Zealand Dollar higher, extending the bull run from last week against the US Dollar (USD) to the 0.6230 zone. The New Zealand economy slipped into a technical recession with GDP results published yesterday for the 1st quarter at -0.1% adding to the fourth Q result of -0.6%. Two schools of thought suggest NZ could be either hiking by year end or conversely the RBNZ will hold until mid-2024. The job market holds the key in our minds, unemployment data is not published until 1st August, anything tight around current 3.40% showing persistence could ultimately force the hand of the RBNZ. Meanwhile the US Fed kept their interest rate on hold at 5.25% pausing as they said they would, ending a 10-run streak of hikes. The hawkish tone of inflation remains with expectations of further hikes in July and possibly November. Despite the run north by the kiwi over the past 2 weeks we still maintain our dovish view of the kiwi over the mid to long term.
The current interbank midrate is: NZDUSD 0.6237
The interbank range this week has been: NZDUSD 0.6104- 0.6242