The New Zealand (NZ) dollar undoubtedly looks weak against its peers as the market digests the possibility of NZ rates peaking. However, the currency is running into some pretty tough support against some of its peers that warrants caution in turning excessively bearish.
NZD is still suffering from the Reserve Bank of New Zealand’s (RBNZ) change in stance that it sees rates peaking at current levels after it last month raised its benchmark rate by 25 basis points to 5.5%. See “New Zealand Dollar Slides as RBNZ Hikes By 25 Basis Points, But Sees Peak in Rates”, published May 24. Moreover, the recent hawkish repricing higher of Fed rate expectations and weaker-than-expected China data has weighed on the risk-sensitive currency.