NZD to enter a consolidation phase from here – BNZ

Jason Wong, Currency Strategist at BNZ, notes that for the second week running, the NZD was one of the worst performing major currencies, with weaker commodity prices doing much of the damage last week and expects the NZD to enter a consolidation phase from here

Key Quotes

“After a rare 10-day losing streak, the NZD managed a small rise on Friday, but on a trade-weighted basis is sitting around levels not seen since October.”

“We expect the NZD to enter a consolidation phase from here. There’s a hint of dairy prices stabilising and with the market’s expectations of Fed policy now re-rated, attention will turn back towards US fiscal policy. Ongoing delays to announced fiscal plans can only mean that political realities have set in and there is plenty of room for disappointment.”

“On the local calendar, we expect Q4 GDP data due Thursday to surprise on the downside relative to market and RBNZ expectations. The fact that the data are so dated could limit any possible adverse NZD reaction, but the balance of risk is for a negative NZD reaction. The other releases on the calendar including the current account, PMI and consumer confidence are not normally market moving.”