The New Zealand dollar continue to carve out fresh lows.
The kiwi is easily the worst performer to start the week, falling 1.28% and continuing to carve out fresh session lows deep into US trading. There is little support until the May 13 low of 0.7320, which is about 50 pips from spot.
On May 13, the RBNZ also announced mortgage lending changes designed to cool the housing market.
Today, New Zealand government announced housing curbs.The government measures include property tax hikes and measures that will make it more difficult for non-residents to acquire homes.
The conundrum for the RBNZ has been a two-track economy, to some extent. Housing has been red hot while the broader economy cools. The targeted measures give the RBNZ room to cut rates and support the broader economy.
NZD/USD
Shortly after the announcement, Bank of New Zealand economists pushed back rate hike forecasts until 2017 and also opened the door for cuts. The said they don't see the RBNZ cutting rates in the next more or two "but beyond that, we are open for debate."
I see the pair falling to below the May lows to at least 0.7200, more if the US dollar can find some life.
