NZD/USD helped along by risk-on Wall Street, RBNZ sentiment firmly hawkish

• NZD/USD holds in positive territory ahead of the RBNZ and Fed. 
• The possibility that the RBNZ hikes by 75bps in August cannot be ruled out.

NZD/USD was a significant amount higher on Tuesday reaching its best level since around the 4th July US holidays. The pair rallied from 0.6114 to 0.6240 and traded into the Wall Street close some 1.15% higher. 

''Markets trended higher overnight as investors now fear markets may have over-assessed the risk of recession,'' analysts at ANZ bank explained. This led to broad US dollar weakness with Fed speakers in the blackout period ahead of next week’s FOMC meeting and a growing consensus that the Fed may be priced too aggressively in money markets. 

The US 10-year yield was up 1.24% to 3.026% turning higher into the final hours of North American trade as the S&P 500 burst into life for a close to 3% day in the green with high beta currencies, such as the kiwi, following in tow. 

Meanwhile, it could be a quieter day in Asia with a lack of top-tier events scheduled. Still, if APAC equities take a leaf out of Wall Street, then that should be supportive for the antipodeans. 

Meanwhile, the sentiment that surrounds the Reserve Bank of New Zealand that has been elevating the kiwi is here to stay. The Analysts at ANZ Bank who are anticipating a 50 bps hike said the possibility that the RBNZ hikes by 75bps in August cannot be ruled out. ''The second quarter labour market statistics on August 3 will be watched very closely.''