FXStreet (Barcelona) – Imre Speizer of Westpac, maintains a bearish outlook on NZD/USD, expecting the pair to see 0.6590 over a 3 month view and 0.65 over a 12 month view.
Key Quotes
“Week ahead: NZD/USD today reached our near term target of 0.6795 (July 2010 low) and remains a bearish proposition. The RBNZ is in easing mode, it wants the exchange rate lower, and the momentum of NZ economic data is negative. Add to that the recent adverse turn of events in Greece and we have most boxes ticked for further NZD/USD weakness. We expect it to retest the 0.6795 level and trade below that during the next few weeks.”
“The main NZ event of interest this week is the dairy auction (Wed). There’s also building permits and business confidence (both Tuesday), and QV house prices (Friday) on tap.”
“3 months ahead: Below 0.6795 the next major level is 0.6560 which was a major low in May 2010. The two main factors expected to contribute to NZD/USD weakness during the next few months are RBNZ easing and Fed tightening.”
“The main risks to this view are positioning and US disappointments. Regarding the former, futures speculators are now record short NZD/USD, flagging the risks of a positioning. Regarding the latter, if the US data during the next few months is patchy, or there is a global shock (such as a Greek eurozone exit) the Fed may delay hikes, weakening the US dollar.”
“1 year ahead: Lower to 0.65. The RBNZ will be in easing mode during the year ahead, while the Fed should be in tightening mode. Relative interest rates will thus favour the USD over the NZD.”
(Market News Provided by FXstreet)