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NZ dollar leads G10 on RBNZ hawkish repricing, ING says
ING says the market is pricing too much additional RBNZ tightening at about 60bp, and expects AUD could regain ground versus NZD if tensions ease.
ING strategist Francesco Pesole said the New Zealand dollar has been the best-performing G10 currency since the start of the week, supported by last week’s Reserve Bank of New Zealand rate hike and subsequent hawkish repricing.
Pesole argued that FX markets are favoring currencies with room for further domestic tightening, beyond any boost from commodity exposure. However, he cautioned that current pricing of an additional 60bp in RBNZ tightening is too aggressive.
He added that if Gulf tensions ease, the Australian dollar could regain ground versus the NZ dollar. Separate market snapshots cited in the same outlook noted GBP/USD holding above 1.3350 with the 200-day simple moving average capping gains, while EUR/USD retook 1.1400.
The broader trading backdrop referenced in the outlook included renewed US military strikes against Iran and upcoming US economic releases, including June Consumer Price Index data and Fed Chair Warsh’s testimony, both of which could affect dollar moves.
Latest closeEUR/USD 1.139 ▼0.4%|GBP/USD 1.335 ▼0.5%