NZD/USD is trading flat in early Asia in a tight range, virtually stationary near 0.7243.
Despite a softer greenback on Tuesday, the bird was unable to capitalize in a mixed risk tone and softer equities.
NZD/USD climbed from Monday’s 0.7181 lows to score a high of 0.7271 before sliding back to 0.7235 in mid-North American trade.
”We are treading water ahead of tomorrow’s Budget and next week’s Reserve Bank of New Zealand’s MPS,” analysts at ANZ Bank explained.
”Longer-dated expectations for the OCR have now stabilized, with around 80% odds of a hike by next May now priced in, which we think seems fair given our call for “lift-off” in August next year,” the analysts added.
”Fresh support from interest rates for the NZD is thus unlikely in the near term, but we do expect the Fed’s stance and higher US inflation to weigh on the USD and for commodity prices to be supported, helping the NZD.”
Meanwhile, the dollar dipped on Tuesday for the fourth straight session, reaching its lowest level against a basket of currencies since late February.
Simultaneously, US Treasury yields were anchored as well while the markets become more confident that the Federal Reserve will hold off on tightening its accommodative monetary policy.
NZD/USD Short (Sell)
ENTER AT: 0.72010