The NZD/USD made steady gains overnight, hand-in-hand with the AUD/USD, and sits 0.65% higher since yesterday morning at 0.8430. Disappointing local data failed to stem the march upward. Yesterday, Q4 building work fell by 1.0% m/m, against market expectations of a 3.1% gain. While we are treating this as a timing issue, given the strong upswing in construction, this will leave a hole in forecasters’ Q4 GDP calculations. That said, we do not think this will affect the RBNZ’s policy outlook. The continued recovery in risk sentiment is particularly evident in the NZD/JPY, which has gained 0.9% since yesterday morning. The cross currently sits at 86.30, its highest level since mid-January (and before that month’s emerging-market rout). A similar dynamic is apparent in NZD/CHF, which is up by 0.7%.
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