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Can Kiwi Take out the Top?
With a current yield of 2.25% the NZD/USD remains the best carry trade in the industrialized world. And although the RBNZ warned the market that it will cut rates later this month, the pair remains well bid as yield hungry investors continue to chase whatever return they can get.
Although the RBNZ has been adamant about its easing bias, the New Zealand economy remains relatively buoyant and today’s Labor data with unemployment rate expected to stay at 5.7% would make it difficult for authorities in Auckland to argue that much more easing needs to be done.
With NZD/USD within striking distance of yearly highs of .7300 the pair could challenge that level if the data proves better than projected. A break above the .7300 could open a run towards the key .7500 level while a disappointment should find support at the .7100 figure.