NZD/USD: a second take on fundamentals - ANZ

Analysts at ANZ noted that the NZD has opened the week on the back foot. 

Key Quotes:

"While it remains higher than it was a week ago, its drop from last week’s ~0.7265 high remains front of mind. 

We expect USD strength to be a feature of the landscape in coming weeks as expectations of a December Fed hike firm up. 

But there’s a difference between “strong” and “stronger”, and our sense is that the USD is now fully priced, and needs something new to drive it materially higher. 

Against that, we have two “new” emerging themes – the first being prospects for a post-Fed hike anti-climax; the second being firming expectations that 2017 OCR rate cuts in New Zealand are not assured. 

Barring a shift in the global scene, with GDP growth of ~4% beckoning locally, and rates levelling out, at “worst” NZD will be range-bound, at “best” it goes up."