NZD/USD to target 0.7000 - Westpac

Imre Speizer, Research Analyst at Westpac, explains that NZD/USD’s 1.5 cent rebound last week is mainly a function of a stalled USD plus previously excessive concern the RBNZ’s mandate would change in a dovish direction.

Key Quotes

“We target 0.7000, before the trend decline resumes. The NZ data calendar highlight this week will be the RBNZ MPS (Thu). We expect no change to the policy paragraph, OCR track, and the OCR, although there’s a risk of a dovish flavour to the commentary given slower housing, migration, construction and GDP. The GDT dairy auction (Tue) also poses negative risks for the NZD.”

“Three months ahead: Our medium term outlook for NZD/USD is largely dependent on the outlook for the US dollar. A persistent rebound in the US dollar could drag NZD/USD lower to the 0.67 area by year end.”