A snippet from Westpac - thier outlook for the New Zealand dollar:
Yield spreads have jumped in the NZD’s favour following strong inflation data
NZD/USD appears well on track to reach the 0.7465 high, last seen in February, by year-end
- The economy remains on a solid footing
- activity should jump once Covid restrictions are relaxed (expected before December)
- the RBNZ will lead NZ-US yield spreads higher
- and commodity prices retain a positive outlook
---
Yesterday's 94 new cases of coronavirus reported in NZ stirred a little concern on the reopening path for some. As the vaccination rates improve in NZ, and all that entails (a higher vaxxed population will see fewer severe cases of COVID-19, few hospitalisations, fewer ICU admissions, fewer ventilations, fewer COVID-19 deaths - note, not zero, fewer - and thus less strain on the health system and less need for lockdowns) NZ's new non-zero COVID-19 policy will accelerate.
Same argument for Australia down here in this part of the world.
