NZD/USD: Upside risks - Westpac

Sandeep Kanihama FXStreet Contributor

Following a 7% fall since August, NZD/USD rebounded 2% last week, mostly reflecting a 2% fall in the US dollar index last week and for the week ahead, the USD could fall even further, posing upside risks for NZD/USD, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Regarding local factors, we have NZ CPI, which we expect to register a temporary spike and thus pose upside risks for the NZD. Same goes for the GDT dairy auction (2% gain in WMP priced by futures). In addition, there’s the government formation announcement, which poses two-way risks.”

“Three months ahead: Our medium term outlook for NZD/USD is largely dependent on the outlook for the US dollar. A persistent rebound in the US dollar by year end is needed to pull NZD/ USD back to the 0.70 area.”

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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