The New Zealand dollar remained mainly range-bound through trade on Tuesday bouncing between intraday lows at 0.6535 and session highs at 0.6570. Despite ongoing pressure on equities and US treasury yields, amid a heightened risk-off environment, moves within currency markets have mainly been modest. Traditional haven plays are seeing traction with the JPY and CHF finding support; however, the contagion and fear that has plagued stocks appear not to have spread to currencies at this point.
With little macroeconomic data on hand, we expect the NZD will remain range-bound, responding to newswire headlines as risk sentiment continues to evolve. While well supported on moves approaching 0.6435 we expect upside momentum to be mostly muted as pressure on commodities, led by oil, and the broader risk-off tone weigh on investors’ appetite to drive the Kiwi higher and extend on recent moves toward 0.66.