Flash: NZD/USD could eventually enjoy yield advantage – UBS

FXstreet.com (New York) - The RBNZ warned again overnight that rapid house price inflation persists in Auckland and Canterbury and stressed that the Reserve Bank does not want to see financial or price stability compromised by housing demand, notes Gareth Berry, a Research Analyst at UBS.

Key quotes

“The prospect of an RBNZ rate hike suggests the NZD could eventually enjoy a yield advantage - perhaps before the year is out.”

“While we wait for policy settings to converge, the clear divergence in policy stances even now should be enough to keep the AUDNZD downtrend intact for the foreseeable future.”