NZD/USD drops to the fresh seven-week low during a three-day downtrend. As analysts at ANZ Bank note, the overall FX market backdrop does seem to favour the USD.

RBNZ might be done after a couple more hikes

“With global recession fears percolating, FX markets attuned to a risk-off vibe, UK gripped by political/energy/inflation woes, Europe struggling under the weight of energy prices, drought and a war on its back doorstep, and the Bank of Japan resolute in its desire to maintain easy policy, markets will naturally be attracted to the USD, and in blunt terms, that is where the risks lie for the kiwi.”

“The idea that the RBNZ might be done after a couple more hikes isn’t helping either (we think the risks are skewed to more, but the market doesn’t think that).”