The kiwi has surged to around 0.6550. The USD is on the skids, NZD price action is upbeat, but NZ hard landing fears have not gone away, economists at ANZ Bank report.

USD may re-emerge supreme

“We can cite reasons why the USD may re-emerge supreme (growing global recession fears, high energy prices, scope for a return of volatility) but for now, risk and commodity currencies are being well supported.”

“Higher rates are helping the Kiwi (that’s evident in NZD/AUD) but it’s likely that the May MPS marked peak RBNZ ‘hawkish surprise’. It’s hard to see future MPSs being so hawkish relative to market expectations; that makes us more cautious than otherwise on the NZD’s prospects.”

“Fears of a hard landing here also continue to percolate; that’s another potential NZD headwind”