NZD/USD Targets 0.7175 During the Month Ahead - Westpac
Imre Speizer, Senior Market Strategist at Westpac, notes that the
NZD/USD has oscillated around an upward trend since mid-Jan, and targets
0.7175 (Feb 2015 low) during the month ahead.
Key Quotes
“Recent
NZ economic data has been stronger than expected (housing market, CPI),
weakening arguments for an April (vs June) OCR cut. First though,
NZD/USD must overcome the stubborn 0.6965 level.
NZ’s data
calendar is much busier this week. The highlight - Q1 CPI - has just
passed (resulting in a small positive surprise. But there’s also market
moving potential from the GDT dairy auction (Tue, and currently
predicted by futures to rise 3%) and monthly ANZ consumer confidence
(Thu). There’s also migration (Thu) and credit card spending (Thu).
3 months:
We retain our long-held view that NZD/USD will decline throughout the
year, but we have raised our mid-year target to 0.65. The basis for our
view remains a combination of a lower OCR and better US economic data.
Admittedly, we have been surprised by the degree of skepticism regarding
the Fed’s tightening cycle which has resulted in a sharp decline in the
US dollar. And there is a risk that the Fed will be more hesitant than
we expect. However, we note that early 2015’s skepticism erode once the
US data pulse improved.
1 year: Our macro-economic based forecast for one-year ahead is 0.62, based mainly on a lower OCR and a higher US Fed rate.”
