15 Jun 2015
Bearish on NZD/USD, might see 0.65 on 12-M view – Westpac
FXStreet (Barcelona) - Imre Speizer of Westpac, maintains the bearish outlook on NZD/USD, expecting a push below 0.6940 this week and further shares the 3M and 12M forecast for the pair.
Key Quotes
“Week ahead: We maintain our bearish outlook for NZD/USD. The earlier than expected easing by the RBNZ has catalysed the markets to price in an easing phase of more than 50bp. We expect such behaviour to continue, as long as dairy prices remain weak, such that a push below 0.6940 is expected this week.”
“3 months ahead: We recently revised our downside target from 0.6950 to 0.6800, that being the major low formed in August 2010. That’s not much of a stretch from here, so we need to look lower and find 0.6560 was a major low in May 2010. The two main factors contributing to NZD/USD medium weakness are expected to be RBNZ easing and Fed tightening.”
“The main risks to this view are positioning and US disappointments. Futures speculators are now record short NZD/USD, flagging the risk of a positioning rebalance. If the US data during the next few months is patchy, the Fed may delay hikes beyond September, 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 is expected to tighten this year. Relative interest rates will thus favour the USD over the NZD.”
Key Quotes
“Week ahead: We maintain our bearish outlook for NZD/USD. The earlier than expected easing by the RBNZ has catalysed the markets to price in an easing phase of more than 50bp. We expect such behaviour to continue, as long as dairy prices remain weak, such that a push below 0.6940 is expected this week.”
“3 months ahead: We recently revised our downside target from 0.6950 to 0.6800, that being the major low formed in August 2010. That’s not much of a stretch from here, so we need to look lower and find 0.6560 was a major low in May 2010. The two main factors contributing to NZD/USD medium weakness are expected to be RBNZ easing and Fed tightening.”
“The main risks to this view are positioning and US disappointments. Futures speculators are now record short NZD/USD, flagging the risk of a positioning rebalance. If the US data during the next few months is patchy, the Fed may delay hikes beyond September, 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 is expected to tighten this year. Relative interest rates will thus favour the USD over the NZD.”