12 May 2015
NZD/USD could drop to 0.70 in 12-month – Rabobank
FXStreet (Edinburgh) - Senior FX Strategist at Rabobank Jane Foley believes the pair could be headed towards the 0.70 neighborhood in a 12-month horizon.
Key Quotes
“Further signs that diary prices are coming under pressure are likely to underpin the RBNZ’s concern about falling revenues and the impact of the value of the NZD”.
“On April 23, Assistant Governor McDermott said that the near zero inflation rate is in part caused by the high exchange rate and he warned that “evidence of weakening demand and domestic inflationary pressures would prompt us to consider lowering interest rates”.
“After its April 30 policy meeting the RBNZ then attempted to talk down the value of the NZD”.
“The dovish tone of the RBNZ and risk of a rate cut is a marked contrast to the hawkish tone which persisted until January this year”.
“We look for a move to NZD/USD 0.70 on a 12 mth view”.
Key Quotes
“Further signs that diary prices are coming under pressure are likely to underpin the RBNZ’s concern about falling revenues and the impact of the value of the NZD”.
“On April 23, Assistant Governor McDermott said that the near zero inflation rate is in part caused by the high exchange rate and he warned that “evidence of weakening demand and domestic inflationary pressures would prompt us to consider lowering interest rates”.
“After its April 30 policy meeting the RBNZ then attempted to talk down the value of the NZD”.
“The dovish tone of the RBNZ and risk of a rate cut is a marked contrast to the hawkish tone which persisted until January this year”.
“We look for a move to NZD/USD 0.70 on a 12 mth view”.