NZD emboldened by rising commodity prices and monetary policy repricing

Daily Currency Update

The New Zealand dollar outperformed the majority of major counterparts through trade on Monday rallying on the heels of elevated commodity prices and a broader monetary policy repricing. A risk off tone forced the NZD toward intraday lows below 0.6660 through the early part of the domestic session as investors absorbed events of the weekend, digesting the impact of fresh sanctions. Having tracked sideways through local trade the NZD found support and momentum overnight, advancing back through 0.67 and toward intraday highs at 0.6780. Commodities maintained their upside bias as investors looked to pare back expectations for monetary policy tightening, scaling back Fed rate hike bets. While risk demand continues to drive near term direction, a broader correction in US monetary policy expectations could help propel the NZD higher and prompt a break beyond recent support and resistance handles. Our attentions remain affixed to developments in Eastern Europe and the subsequent fallout/impact on global financial markets.