NZD/USD: Higher interest rates may not be enough to propel the Kiwi – ANZ

NZD/USD has broken through the key 0.6235 resistance level and looks solid, supported by higher rates. But beware of hawkish Fed rhetoric, economists at ANZ Bank note.

There is still uncertainty

“We do think higher interest rates and the RBNZ’s hawkish stance are, on balance, a positive for the Kiwi, but newspapers are awash with recession talk, and that of course brings with it the risk that negative sentiment starts to feed on itself.”

“The big global uncertainty is; how does the USD treat the prospect of the Fed slowing down the pace of hikes, but potentially higher terminal rate? Does that feed bearish sentiment, or help USD carry? So there is still uncertainty.”

“Support 0.5875/0.6000 Resistance 0.6470/0.6575”