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20 May 2015
NZD/USD expected to move lower towards 0.72, 3M view – Westpac
FXStreet (Barcelona) - Imre Speizer of Westpac, expects NZD/USD to break below 0.7300 during the next few weeks.
Key Quotes
“NZD/USD has been weighed down by market expectations the RBNZ will cut the OCR this year. Housing market tightening measures, announced by the RBNZ and the Government during past week, have emboldened that view, while yesterday’s report showing surprising stability in inflation expectations may be viewed as providing a minor rally to sell into. Actual CPI outcomes are expected to remain near zero all year. We target sub-0.7300 during the next few weeks.”
“This week’s NZ calendar highlight will be the Budget on Thursday. However we don’t expect anything to surprise the NZD, with a near term return to fiscal surplus forecast.”
“3 months ahead: Lower to 0.72. Near-zero inflation will encourage markets to price in even more RBNZ easing.”
“Technically, the rising wedge formed during Jan-Apr broke down on 1 May and followed through, arguing for a further decline to 0.7200 – the January and March lows.”
“1 year ahead: Lower to 0.71. The RBNZ will either be on hold or in easing mode during the year ahead, while the Fed is expected to tighten this year. Relative interest rates will thus favour the USD over the NZD.”
Key Quotes
“NZD/USD has been weighed down by market expectations the RBNZ will cut the OCR this year. Housing market tightening measures, announced by the RBNZ and the Government during past week, have emboldened that view, while yesterday’s report showing surprising stability in inflation expectations may be viewed as providing a minor rally to sell into. Actual CPI outcomes are expected to remain near zero all year. We target sub-0.7300 during the next few weeks.”
“This week’s NZ calendar highlight will be the Budget on Thursday. However we don’t expect anything to surprise the NZD, with a near term return to fiscal surplus forecast.”
“3 months ahead: Lower to 0.72. Near-zero inflation will encourage markets to price in even more RBNZ easing.”
“Technically, the rising wedge formed during Jan-Apr broke down on 1 May and followed through, arguing for a further decline to 0.7200 – the January and March lows.”
“1 year ahead: Lower to 0.71. The RBNZ will either be on hold or in easing mode during the year ahead, while the Fed is expected to tighten this year. Relative interest rates will thus favour the USD over the NZD.”