NZD: Underperformer for the week – Nomura

Analysts at Nomura point out that the underperformer this week was kiwi as at this week’s meeting, the new RBNZ Governor Orr said that that the cash rate will remain unchanged “for some time to come” and that the “direction of our next move is equally balanced, up or down”.

Key Quotes

“On strategy, we remain comfortable with our view that RBNZ will lag the RBA in tightening – we have RBNZ first raising rates in the second half of 2019, while we still forecast the RBA to move this coming November. We remain long AUD/NZD, targeting a move towards 1.11 over coming months. Markets appear to agree with our assessment, with NZ short-end rates lower, and NZD lower too.”