NZD: Near term direction to be determined by the makeup of the new government - Westpac
|According to Imre Speizer, Research Analyst at Westpac, NZD’s near term direction will largely be determined by the makeup of the new NZ government and left leaning will push NZD lower while right leaning will push it higher.
Key Quotes
“Beyond that reaction, we remain of the view that NZD/USD will fall below 0.7000 by year end, driven by a continuing decline in NZ-US interest rate spreads.”
“In addition, there’s emerging evidence of a slippage in dairy prices, probably demand (rather than supply) driven. This slippage has capped the overall NZ commodity basket (mainly dairy, meat and wood). This is already priced into the NZD, judging by the chart across, but there is a risk that commodities slip further, particularly if China growth slows next year.”
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