FX markets remain very USD-centric and while pondering local factors and target levels, we think it pays to keep in mind that this is all a dollar story and where that leaves the Kiwi is very secondary.

US 10-year bond yields haven’t quite hit 5% but they are higher, and we still worry about USD upside risks, especially with Fed Chair Jerome Powell keeping a very open mind while admitting that the neutral US policy rate may be higher and that we may be entering a period of higher inflation.

Lots to ponder, but stepping back, NZD price action (lower lows and lower highs) is ugly.