RBNZ might cut rates in July and further too, NZD/USD expected to fall – Westpac

FXStreet (Barcelona) – Dominick Stephens of Westpac, expect the RBNZ to cut its OCR by 25bp at each of the July, September and October RBNZ meetings, and further forecasts NZD/USD to see 0.62 by 2015-end.

Key Quotes

“We were forecasting 25bp OCR reductions in July and September. On top of the June cut that has already occurred, our forecast implied a total of three OCR cuts in 2015, and a terminal OCR of 2.75%. In our commentary we noted there was a risk of a fourth OCR cut this year. Over the past week emerging news has shifted that fourth cut from a risk scenario to a likelihood.”

“Accordingly, we are now forecasting 25bp OCR reductions in July, September and October. This will take the OCR to a low of 2.5% this year.”

“Commensurate with our lower OCR forecast, we are now forecasting an average NZD/USD exchange rate of 62 cents in the December quarter of 2015.”

Dominick Stephens of Westpac, expect the RBNZ to cut its OCR by 25bp at each of the July, September and October RBNZ meetings, and further forecasts NZD/USD to see 0.62 by 2015-end.

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