NZD’s turbo-charged run - ANZ

Analysts at ANZ explained that there have been valid reasons for the NZD’s turbo-charged run, with the TWI popping through 79 yesterday and broadly at the figure today. 

Key Quotes:

"Soft commodities have performed well. Volatility has been low and carry remains attractive. The USD has struggled. Whether last night represents a turning point is not yet clear. However, US data looks to be basing (GDP estimates for Q2 have nudged up). 

Market positioning is massively long the NZD. Central banks are cautious but still inching towards QE exit doors. Policy uncertainty should translate into market volatility and we note last night’s spike.

Historically, the NZD has not been performed well around an election. The author is not bearish the NZD given the local economic story, but is certainly wary of chasing it higher up here."