NZD USD BULLISH

The primary drivers for NZD are its high-beta status and the RBNZ's monetary policy outlook.

As a high-beta currency, NZD has remained broadly well supported in times of risk-on and as the overall risk outlook and tolerance of the market has improved over recent months. With coronavirus vaccines programs now underway in many countries, we expect the months ahead to see a further gradual improvement in the overall risk outlook and global economic outlook.

Additionally, expectations for further easing by the RBNZ and the adoption of negative rates has notably declined. Consequently, with further easing from the central bank in the immediate future viewed as being highly unlikely, NZD is likely to find support against currency's which have much more accommodative central banks.

All-in-all, with the RBNZ on hold, improving commodity and global economic outlooks and New Zealand's strong grasp on its domestic coronavirus situation, NZD should remain broadly well supported.