NZD/USD is losing ground, down some 0.5% and falling from a high of 0.6270 to 0.6214 on the day so far. All in all, it's been relatively quiet mid-week. Meanwhile, market worries about the banking system have ebbed following a U.S. regulator-backed sale of failed lender Silicon Valley Bank's assets.

Nevertheless, as analysts at ANZ Bank noted, ´´US 10yr bond yields haven’t moved much; the bounce in equities and commodities did little for the Kiwi. It’s a quiet week on the data front, and some consolidation was always due ahead of next week’s OCR decision.´´

In this regard, the analysts said that markets seem to be coming around to the view that we’re likely to get a hawkish tone, and are slowly pricing out hikes that were expected in the second half of the year. ´´But fears of a credit crunch are alive and well in markets around the globe, and broad risk appetite (a key ally of the Kiwi) is suffering a touch as a result.´´

In a prior note, the analysts said that they ´´expect the Reserve Bank of New Zealand will raise the Official Cash Rate (OCR) 25bp to 5.00% at its Monetary Policy Review (MPR) next Wednesday. If that’s not to be, we see a 50bp hike as likelier than a pause.´´

As for the greenback, DXY is up slightly and trading near 102.70 after two straight down days.  However, a firm move below 102.50 would expose last week’s low near 101.915.  With that being said, analysts at Brown Brothers Harriman argued that ´´markets are overestimating the Fed’s capacity to ease and so the dollar should eventually recover when expectations are repriced.´´