"NZD weakness continues to look fundamentally unjustified"
The headline is a snippet from BNZ, what they conclude after looking at supportive factor for the New Zealand dollar:
- a backdrop of rising commodity prices, for example, a fifth consecutive daily gain in Bloomberg's commodity price index
- BNZ say their proprietary risk appetite index has risen to a pandemic high
- higher NZ-global rate spreads as the RBNZ looks to be well ahead of the pack in terms of expectations of tighter future monetary policy
Analysts at the bank also note the weaker AUD, and say:
- The only possible explanation for the weak performance of commodity currencies is some focus on emerging market economies as the delta variant of COVID19 spreads across the world - areas that remain largely unvaccinated.
- It's certainly not an entirely convincing explanation ...
Greg and Adam both noted the weaker AUD and NZD Tuesday US time:
- NZDUSD scoots lower after cracking the 200 hour MA
- AUD/USD stalls out at the 50% retracement and sinks