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    NZD/USD has limits to how high it can go, time to fade? - ANZ

    Analysts at ANZ eplained that near term, they expect the NZD and short end rates to be under pressure to pop higher on adverse positioning and confirmation of no change (recall that the market was pricing in around 30% odds of a cut). Key Quotes: "However, with the currency still playing a role in upcoming deliberations, there’s a limit to how high the NZD can go, and we favour fading the initial knee-jerk reaction higher in both markets. In that regard we note that the Bank’s downside scenario (which takes the 90 day bill rate below 1%, pointing to an OCR at 0.75%) is associated with the TWI holding steady, rather than rising, suggesting the currency hurdle to easing is not overly high (especially if housing can be cooled via macro- prudential policy). In other words, we’re back to MCI trading."


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