NZD/USD bulls move in as US dollar melts from 20-year highs

• NZD/USD bulls have moved in as the US dollar sells off into month end.
• The greenback and US yields were underwater on Wednesday and the high beta currencies took off.

NZD/USD rallied on Wednesday following a strong sell-off in the US dollar as the month-end approaches. NZD/USD rallied by some 1.8% from a low of 0.5564 to a high of 0.5733 the high.

This came on the back of the US dollar index melting through a cascade of market orders across the major currency complex from 114.778 to as low as 112.561 in a matter of half a day of trade between the late London session and New York opening hours. 

''The Kiwi is back above 0.57 this morning, having regained a touch of composure alongside a plethora other risk assets in the wake of the Bank of England’s decision to “temporarily” buy bonds and to delay plans for QT,'' analysts at ANZ Bank explained:

''It’s all a bit of a mess and very contradictory, and how long the calm/fresh optimism lasts remains to be seen. For one, this re-stimulation will lift, not quell UK inflation, and that’s bad for bonds and sterling. Prior to that, the US White House had said that it isn’t in favor of a new Plaza Accord-type deal to cap the USD’s strength. Those looking to politicians to end the dollar’s reign may be looking in the wrong place.''

''Amid opposing short and long-term influences, we think it pays to keep a very open mind, brace for volatility, and manage risk carefully,'' the analysts added.