Sell NZD/USD on Strength, Buy USD/CHF on Dips - Westpac
Research Team at Westpac, suggests to sell NZD on strength at 0.6840, stop at 0.6910.
“The US dollar continues to strengthen - up 4.2% since 3 May - pushing NZD/USD lower. This de facto loosening has caused the market to back off the view the RBNZ will cut in June, but at only a 20% chance NZ short-end rates probably won’t rise much further ahead of the meeting on the 9th. That should allow the NZD to fall a bit faster if the US dollar continues to rise. We target sub-0.6650 this week.
We buy USD/CHF on dips to 0.9805, stop at 0.9695, with risks building for CHF underperformance vs European counterparts. A less dour sounding Draghi, backed by probable higher staff CPI projections at this week's press conference and a probable win for the "Bremain" camp 23 June should all sap CHF of any attractions on crosses vs its European counterparts.”