A broad strengthening in the USD shaved around ½ cent off the NZD/USD overnight. Still, at around 0.7960, it remains firmly within the bounds of its recent trading range. Absent a big surprise from today’s retail figures, we suspect the 0.7900-0.8060 range will continue to contain the NZD/USD in the short-term.
Speculative buying of USD/CHF and USD/JPY tended to dominate what was otherwise a fairly quiet offshore trading session. Upbeat US retail figures are being widely touted as the driver of a firming in the USD. However, speculative appetite to jump aboard what looks like a renewed uptrend in USD/JPY looks to be the bigger driver. This has implications for NZD/JPY of course, which rose from 77.60 to around 78.40 overnight. We anticipate a move towards 80.00 in coming months as Bank of Japan easing expectations begin to ramp up again.
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