The New Zealand dollar is flirting with 0.7000 as it continues to benefit from today's US dollar softness.
I'm always skeptical of quarter-end moves but this is a nice flourish to the best levels since November. Moreover, the dip early this week relieved some of the overbought conditions and highlights underlying demand.
Financial markets are increasingly divided into two camps:
1) Those who see an imminent and dramatic slowdown in global growth along with central bankers who will be forced to hike beyond comfortable levels into a stagflationary environment.
2) Those who see a return to the 'old normal' with healthy but not overly high inflation. The result is central bank divergence and a constructive backdrop for commodities.
The latter scenario argues for much higher commodity currency prices.
