NZD/USD: A higher OCR should help the Kiwi – ANZ

The NZD/USD pair has had a whippy sort of week, ebbing and flowing with US and New Zealand policy expectations. Economists at ANZ Bank analyze Kiwi’s outlook.

NZ economy is showing signs of resilience

Whereas there is clearly scope for US markets to pare expectations for early cuts, consistent with Fed messaging, if the NZ market hikes, it is a very different proposition. 

Given that we are only talking about hikes because the economy is showing signs of resilience, we think a higher Official Cash Rate (OCR) should help the Kiwi.