NZD/USD leans bearish in phase of consolidation

• NZD/USD is consolidating at the start of the week in mixed risk sentiment. 
• Poor performance on crosses suggests the Kiwi is still out of favour.

NZD/USD is flat after falling by 1% last week due to fears of a repeat of the systemic banking crisis that swept through markets in 2008. On the day so far, NZD/USD has traveled between a low of 0.6180 and a high of 0.6211. 

Sentiment, however, remains fragile due to concerns about a global credit crunch. ´´The roller-coaster ride continues, again leaving FX markets fairly untouched. Which begs the question; will NZ’s remoteness to all this deliver NZD strength if the RBNZ can get the OCR to 5¼%? It might, especially if things are wobbly enough to keep the Fed from tightening much more, but not wobbly enough to crash things,´´ analysts at ANZ Bank explained. ´´But poor performance on crosses suggests the Kiwi is still out of favour.´´ 

Elsewhere, a surprisingly large contraction in New Zealand's growth numbers in Q4 of 2022 came as the RBNZ is still in the process of cooling runaway inflation. The central bank has lifted its policy rate by a total of 450 basis points in ten straight meetings, pushing the cash rate to a 41-year record of 4.75%.

Meanwhile, the IMF chief Kristalina Georgieva said Sunday that 2023 would be another challenging year, with global growth slowing to below 3%, reflecting the impact of pandemic disruptions, the war in Ukraine, and monetary tightening. She added that even with a better outlook for 2024, global GDP will remain below its historic average of 3.8% and the overall outlook remained weak.