The NZD is on another run higher this morning, testing close to the 0.63 psychological level.
NZDUSD testing close to 0.63
The NZD has caught many by surprise after the currency failed to push lower following the recent dovish tilt by the RBNZ.
I think positioning can take some of that blame as the markets were already quite bearish on the NZD heading into the RBNZ decision and had priced in a fair bit of bad news for the currency in recent weeks.
The trigger for today’s jump in the NZD is the ANZ Business Outlook and Own Activity data, with the Business Outlook jumping to 50.6 which is the highest since 2014.
Even though the report was solid, it’s worth noting that much of the optimism wasn’t just due to the RBNZ’s rate cut, as the jump in optimism was seen in collected surveys ahead of the cut. Of course the optimism from expected cuts obviously helped though.
It wasn’t all rosy though, ANZ did add a caveat in the report by saying that the ‘reported past activity, which has a good
correlation to GDP over its short history, barely lifted, and at -23 remains
very weak.’