NZD recovers weeks early losses on heels of weaker USD

Daily Currency Update

The New Zealand dollar advance through trade on Tuesday, climbing back through US$0.62 as markets looked to unwind US dollar gains won through trade on Monday. With little domestic macro data on hand to drive direction, the NZD tracked within a narrow bank through much of the domestic session bouncing between US$0.6180 and US$0.62. Despite a slew of US earnings data price action was largely muted overnight with equities and treasuries flat. Markets looked to unwind Monday’s USD gains allowing the NZD to extend its recovery back through US$0.62 overnight. Having marked intraday highs just short of US$0.6225 the NZD retreated into the morning’s close and now currently buys US$0.6205 with the little net movement against major crosses.
With little note on the macroeconomic ticket, we anticipate the NZD will again track within recent ranges ahead of tomorrow morning's all-important quarterly CPI print. With inflation pressures stubbornly sticky another elevated inflation print will elevate calls for further monetary policy tightening at a time when there are growing calls to suggest the RBNZ has stifled economic growth by moving too aggressively.