NZDUSD: Another attempt at 0.7500 is on the cards - Westpac

Imre Speizer, Research Analyst at Westpac, suggests that the key NZ event for the NZD will be Thursday’s RBNZ OCR announcement.

Key Quotes

“The interim meeting, resulting in only a one-page press release, will almost certainly keep the OCR on hold at 2.0%, but should also signal a rate cut in November is likely (via a repeat of the phrase “...further easing will be required.”. This outcome is priced in by markets, so that any watering down of this explicit easing signal will result in a sharp rally in the NZD.

NZD/USD’s correction from last week’s 0.7486 high was offshore event-driven and could extend to 0.7200 (which is a major technical support level). But NZ fundamentals are unambiguously positive: strong growth at 3.6% y/y and a rebound in NZ’s key commodity prices, led by dairy. Another attempt at 0.7500 is on the cards during the month ahead, assuming a calmer mood in global markets.”