NZD/USD: Cautious in the medium-term – ANZ

Kiwi is squeezing higher on poor positioning and USD weakness. Price action is strong but analysts at ANZ Bank remain cautious medium-term.

Key quotes

“The Kiwi has bounced strongly, mostly on broad USD weakness, but also on what seems to be a bit of a short squeeze,fuelled in the last hour or so by downbeat comments by the Fed.” 

“The equity market has ignored the Fed and the bond market was disappointed not to see any fresh easing. Regular readers will be aware that we’re cautious medium-term; but in coming days a test higher looks to be on the cards.”