The “hawkish” comments from the Reserve Bank of New Zealand (RBNZ), in addition to the drive for vaccination, are positive domestic events for kiwi, Westpac analysts note. Hence, they see that the NZD / USD is set to climb above the 0.70 level over the next week.
Key statements:
“The NZD / USD break in the wake of the local Covid outbreak did not hold, the recent rebound has the potential to take the pair above 0.7000 over the next week. “
“The dollar has weakened as global concerns about pandemic outbreaks and the Fed’s cut have receded.”
“The RBNZ has recently delivered, through comments, some strong signals from the hawks, that it will start to rise (the interest rate) in October and a move of 50bp cannot be ruled out.”
“Although New Zealand’s delta case count continues to accelerate, officials believe it is contained.”
“There is encouraging news about vaccines, which did not start until March 2021. Now, 21% of the total population is fully vaccinated, and the rate is running at more than 20,000 second doses per day (about 0.4% of the population).”
“For now, we see the evolution of events as positive for the NZD.”
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