NZD/USD bulls control the fall of the psychological barrier level
NZD/USD is 0.2% higher in Tokyo, having risen from a low of 0.6228 to a high of 0.6245 during the day. In the aftermath of a weaker US dollar and risk-on approach, the pair has led stocks higher and has been supported by firmer commodities.
Central bank divergence themes are at work, and as ANZ Bank analysts remarked, ''a rising EUR in the aftermath of last night's ECB boost (supported by a hawkish tone and intentions to conclude QE in July) also helped.''
''If proof is required to prove that the USD is doing all the grooving, look at how in sync the AUD and EUR were overnight,'' the analysts noted.
- NZD/USD bulls grab control, falling just short of the psychological barrier of 0.6250.
- In risk-on markets, the NZD/USD bulls remain in control.
- Between the US Dollar and the New Zealand Dollar, fundamentals are mixed.
The decline in first-quarter GDP now implies New Zealand is in recession; we regard this as a downside risk to NZD sentiment, even if the recession is technical and may be explained in part by one-offs. We are also concerned about the current account; on the other hand, the USD has some unwinding to do. ''Difficult,'' the experts concluded.