NZD/USD: On track to test 0.6785 - Westpac
|In view of Imre Speizer, analyst at Westpac, NZD/USD pair is on track to test 0.6785, the mid-April peak, and a classical 62% retracement of the March-May decline.
Key Quotes
“NZ-US interest rate spreads have been the dominant driver of NZD/USD this year, with markets focussed on the respective central bank shifts in stance.”
“NZ-US yield spreads have risen as Fed easing expectations have outpaced RBNZ easing expectations, and that should persist until the next Fed and RBNZ decisions. After that, assuming cuts are delivered by both central banks, respective guidance will become important and will be compared with what’s already priced.”
“If neither signal follow-up cuts, NZ-US yield spreads could reverse (currently two cut are priced for NZ, four cuts for the US) and cause NZD/USD to head towards 0.6500 – our year-end target.”
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