FXStreet (Edinburgh) – Pullbacks in NZD/USD appear as limited, according to strategists at TD Securities, while in the longer run the pair could test the 0.62 handle.
Key Quotes
“A soft +0.2% Q1 GDP report cemented expectations for a July OCR cut, although a few one-off elements hint at a rebound for Q2”.
“Nevertheless, 2015 GDP looks more like trend growth of 2.6% instead of 3.0%. Housing indicators remain robust, while dairy prices continue to fall (-15% in Q2), and business and consumer confidence are wilting from the dairy drag. Next CPI report on July 16 not relevant for cuts this time”.
“The RBNZ cut/easing bias placed considerable downward pressure on the NZD (and TWI) so we brought forward some of next year’s weakness into this year”.
“However, with net long positions quite stretched and a cash rate of 2.75% more or less already priced in, it is difficult to expect much more in the way of downside in the near term. We target $US0.69 by year end, but $US0.62 by end-2016”.
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