Imre Speizer, Research Analyst at Westpac, explains that NZD/USD has been oscillating in a 5c range during the past six months and last week’s rebound from the 0.6900 area could easily extend to the 0.7150 area during the week ahead, especially if the FOMC-induced US dollar unwind continues.
“However, local events are more likely to lean the other way.”
“The GDT dairy auction on Tue night is priced by futures markets to result in a 4% fall in WMP. That would extend a 23% total fall since December.”
“The RBNZ OCR Review on Thursday is likely to repeat its long-time-onhold message, but there’s a risk of a slight dovish shift in tone. Weaker dairy prices, subdued housing, and slower economic growth are only partly offset by stronger inflation and a weaker NZD TWI.”
“3 months: Against a backdrop of large oscillations in NZD/USD during the past six months, we err on the side of negativity for the next few months. Our main rationale remains our expectation the US dollar will continue to trend higher amid a tighter Fed and stronger US economy.”
“Adding to that, we have an accommodative RBNZ (OCR to remain at its 1.75% record low for the next two years) and, more recently, dairy price weakness.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.