NZD: Guided by the economy – Westpac

Sandeep Kanihama FXStreet Contributor

Imre Speizer, analyst at Westpac, notes that the NZ economy has slowed by more than expected in the second half of 2018 and Q1 this year and while Q1 GDP won’t be reported until June, we expect a 0.5% outturn, with the RBNZ estimating 0.4%.

Key Quotes

“Our data pulse index remains in depressed territory and the NZD is following suit.”

“We do expect a reversal by year-end, as the cancellation of the capital gains tax lifts business confidence and the housing market. That should coincide with a rebound in the NZD, but it’s a Q3 or Q4 story.”

“For now, we expect NZD/USD to extend slightly lower to the 0.6425-0.6525 area over the next month or two. The RBNZ’s easing bias, plus US economic growth outperformance, should maintain downward pressure.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

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