NZD/USD set for a consolidation phase in the high 0.69s – ANZ

The kiwi is consolidating in the high 0.69s after its earlier rout. With no data and interest rates stabilising, the NZD/USD pair should stabilise too, economists at ANZ Bank report.

Key quotes

“The reduction in scheduled government bond issuance in April and lack of LSAP take-up saw bond yields fall further yesterday, contributing to further NZD downside. But beyond the interest rate angle, better government finances are a positive rather than a negative as they point to increased flexibility and better potential growth.”

“The US vaccination recovery and Biden’s $3trn recovery plan pose downside risks via USD strength, but NZD has already come a long way and given the cross-currents, a period of consolidation is due.”

“Support 0.6703/0.6900 Resistance 0.7100/0.7190”