The swings in USD continue to be an overwhelmingly dominant driver. With US 10-year yields still moving higher and our rates team pointing at 5.00% as a potential top, we see more downside for NZD/USD in the near term. 

NZD-positive developments domestically would not prevent a drop to 0.5800 if US bonds remain under the kind of pressure we have seen in recent weeks. 

In the medium run, we still expect US data to turn negative and the Fed to start cutting in the first quarter of 2024, which should pave the way for a sustained NZD/USD recovery.