NZD/USD is down by some 0.3% and fell from a high of 0.6148 to score a low of 0.6111 making fresh lows for the current downtrend as banking sector woes continue to weigh on high beta currencies.

First Republic Bank's shares sank more than 20%, hitting a fresh record low for the second day in a row, on a report that the US government was unwilling to engineer its rescue, after the lender reported plunging deposits earlier this week.

The bears have taken the market toward the 2023 low of 0.6085.´´Given the Kiwi’s outperformance against AUD but staggering underperformance against EUR and GBP, it seems clear that markets are lumping AUD and NZD in the same basket, with the former struggling after softer Consumer Price Index data yesterday, and the latter struggling after yawning trade deficit data yesterday,´´ analysts at ANZ Bank said. ´´High-interest rates are just not cutting it for the Kiwi, and instead markets seem focussed on the big picture: twin deficits, and generally shaky global risk sentiment.´´

Meanwhile, earlier in the month, the Reserve Bank of New Zealand surprised the market and hiked the OCR by 50bps to 5.25%.  Analysts at TD Securities noted that upside risks to inflation have been nudged higher in the near term above Feb MPS forecasts, overriding downside risks to growth.

´´Credit conditions not tightening sufficiently played a key role in the Bank's decision to hike 50bps,´´ they said, adding:

´´We discussed the potential of lowering our RBNZ terminal forecast in our Preview. However, after today's decision we retain our 5.50% peak OCR call. We see limited read-through of today's RBNZ decision for other Central Banks.´´