This via KiwiBank is pertinent given the current level of the kiwi$
- Not so long ago, the NZD Dollar was very much a risk-sensitive currency. And while that may still be the case in the wider scheme of things, we are not currently seeing the Kiwi get pushed around as we once did, in the face of rising global uncertainty.
- Partly some of this is to do with the RBNZ rate track, and the steady outlook in terms of yields. Also we have very high commodity prices as supply shortage fears hit oil and other raw materials.
- Given the NZD has broadly managed to stay near the 0.6800 level over the past week, despite the escalating war in Ukraine, we expect that this week the NZDUSD will maintain above the 0.6750 level, and may even push on to the 0.7000 cent mark.
- The next major target for NZUSD is 0.6891, which we did get through briefly at the beginning of last week, on the back of surging oil prices. Once we have then topped our 200 day moving average (0.6922) then we see the door open to 0.7000 and beyond for the Kiwi.
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Note the remark on the 0.6750 level, which is currently close by.
I'd only add that I'd be hesitant to play down the impact of 'risk' factors shoving around the NZD (and others) at present.
