Analysts at Morgan Stanley remain bearish on the Kiwi dollar even as a Reserve Bank of New Zealand (RBNZ) rate hike is already priced in by the market.

Key quotes

"We maintain a bearish bias on NZD on crosses and continue to see AUD/NZD upside to 1.08. The theme of overtightening in NZ, we think, is continuing to show initial signs with this week's mixed softer-than-expected employment gains, perhaps reflecting further trends to come.”

"While the RBNZ may strike a hawkish tone at its upcoming meeting on 23 February, we think this is already in the price, and thus risk/reward suggests a bias toward it underwhelming market expectations."