NZD/USD fragile on a broader outlook

FXStreet (Guatemala) - NZD/USD is currently trading at 0.7715 with a high of 0.7727 and a low of 0.7713 and 0.08% down on the day.

NZD/USD attempts at the upside have been capped at 0.7780 resistance. the bird had a good run from 0.7693, eventually pushing through 0.7750 although remains better offered and lags across the market on its performance.

However, the level of NZD/USD itself is deceptive when judging the relative strength of New Zealand's exchange rate, as explained by analysts at Bank of America Merrill Lynch (BAML). "While it is more than 12% below its 2014 highs, the RBNZ's trade weighted index has climbed steadily over the past few months and is now just 3.5% below its record highs and above the RBNZ's assumption in its December Monetary Policy Statement (MPS)". Thus, as smaller economy, the bird and strength of the exchange rate and is more exposed to external global shocks while the "US and New Zealand face similar backdrops - solid domestic growth relative to the rest of the world, alongside subdued consumer price and wage inflation" - BAML