27 Jan 2015
NZD/USD on its way to 0.7370? - westpac
Imre Speizer, analyst at Westpac Banking corporation gave his NZD/USD Outlook.
Key Quotes:
"1 week: Near term momentum flipped to negative last week. The two main catalysts were (1) the downside surprise to NZ CPI, which caused markets to start pricing in RBNZ OCR cuts, and (2) the ECB’s announcement of a large and open ended quatitative easing program, which gave the already strong US dollar fresh energy."
"Moreover, the US dollar extended its powerful uptrend since May 2014, despite mildly disappointing US economic data, central bank behaviour dominating other events at present."
"This week’s main local event risk is from Thursday’s RBNZ OCR Review. We expect it to shift from an explicit tightening bias to a neutral one, mainly due to the latest downside surprise from Q4 CPI. Such a shift is priced in but there’s scope for a negative reaction in NZD/USD as markets look ahead to possible OCR cuts."
"From the US, the FOMC meeting plus GDP and wage costs should keep the US dollar elevated. NZD/USD thus should remain under downward pressure targeting 0.7370."
Key Quotes:
"1 week: Near term momentum flipped to negative last week. The two main catalysts were (1) the downside surprise to NZ CPI, which caused markets to start pricing in RBNZ OCR cuts, and (2) the ECB’s announcement of a large and open ended quatitative easing program, which gave the already strong US dollar fresh energy."
"Moreover, the US dollar extended its powerful uptrend since May 2014, despite mildly disappointing US economic data, central bank behaviour dominating other events at present."
"This week’s main local event risk is from Thursday’s RBNZ OCR Review. We expect it to shift from an explicit tightening bias to a neutral one, mainly due to the latest downside surprise from Q4 CPI. Such a shift is priced in but there’s scope for a negative reaction in NZD/USD as markets look ahead to possible OCR cuts."
"From the US, the FOMC meeting plus GDP and wage costs should keep the US dollar elevated. NZD/USD thus should remain under downward pressure targeting 0.7370."