The NZD/USD shed around 1.7% last week, thanks to the double whammy effect of a stronger USD and some sharp losses in the AUD. Nonetheless, key support levels continued to hold, and the currency finished the week around the familiar 0.8200 level. It was a different story in the NZD/AUD. The cross was propelled to 5-year highs around 0.8950 on Friday as the RBA trounced the RBNZ in a Trans-Tasman battle of ‘talk your currency lower’. The fact NZ has an economy threatening to launch, commodity prices near record highs, soaring net migration, and simultaneous dairy & construction booms perhaps rendered a little hollow the RBNZ’s assertions the exchange rate is “overvalued”.
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