This article was first published on Orbex Forex Trading Blog.
This content is synced from the rightful owners. Copyright on text and images belong to the original source.
NZDUSD has been shedding some of its recent gains over the last couple of weeks as risk sentiment has cooled off. This mostly has to do with external factors.
While news from New Zealand has been positive on the COVID front, the rise in cases in other parts of the world has made investors nervous.
After all the rate cuts during the pandemic, the difference in real rates between New Zealand and the US has returned to stability. In previous cycles of QE, investors found NZD a haven in their search for yields.
But not this time around, with near-zero rates. The question now is how long this will continue.
The Monetary Situation
Many analysts expect that the current RBNZ policy won’t be enough to jump-start the now open economy, and more easing will be required.
There is special emphasis on the deterioration in the housing market, which is suffering due to a lack of foreign investment, as travel is still restricted to the islands.
There is an expectation that Governor Orr will be dow...
To keep reading this article, please navigate to: Orbex Forex Trading Blog.