NZD/USD: "We continue to have a constructive view on the NZD" - Nomura

Analyst sat Nomura offered their thoughts on NZD after today's RBNZ.

Key Quotes:

"Given the skew in market positioning and recent outperformance, the knee-jerk NZD dip on the RBNZ release was not unexpected, as the interest rate market pared back some of its lofty near-term expectations.

RBNZ Governor Wheeler himself pointed out that recent market pricing for a late 2017 rate hike got “a bit ahead of itself.” Although we think this positioning adjustment in the NZD could run a little further in the near-term, we do not believe this is the start of a new trend.

We continue to have a constructive view on the NZD over the coming months given the macro backdrop, both domestically and improved signs globally. The mix of New Zealand’s elevated commodity prices, higher nominal and real interest rates, and relative economic strength are NZD positives."