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3 Mar 2014
Flash: NZD/USD outlook up this week - Westpac
FXStreet (Bali) - NZD/USD outlook is bullish this week, notes Imre Speizer, FX Strategist at Westpac.
Key Quotes
"Rallies in NZD/USD continue to be stymied by global mini-shocks, most recently tension in Ukraine and the engineered depreciation of CNY. Against that, NZ’s fundamental outlook remains solid, with milk prices remaining elevated, business confidence at a multi-decade high, and the RBNZ about to embark on a multi-year tightening cycle."
"If EM risks etc subside (we expect at least China’s to do so) then the way is clear for a break above 0.8430 towards the next target at 0.8545 during the month ahead."
"As for the US dollar, we expect this week will be characterised by large swings in both directions. US data is more likely than not to be a USD headwind. Indeed April appears to be the earliest opportunity for a meaningful rally in the USD, with that month likely to deliver the first clean(er) read on underlying US growth momentum and by then Westpac’s US data surprise index is likely to be at levels that warn the disappointing data cycle is close to completion (see Chart 3)."
Key Quotes
"Rallies in NZD/USD continue to be stymied by global mini-shocks, most recently tension in Ukraine and the engineered depreciation of CNY. Against that, NZ’s fundamental outlook remains solid, with milk prices remaining elevated, business confidence at a multi-decade high, and the RBNZ about to embark on a multi-year tightening cycle."
"If EM risks etc subside (we expect at least China’s to do so) then the way is clear for a break above 0.8430 towards the next target at 0.8545 during the month ahead."
"As for the US dollar, we expect this week will be characterised by large swings in both directions. US data is more likely than not to be a USD headwind. Indeed April appears to be the earliest opportunity for a meaningful rally in the USD, with that month likely to deliver the first clean(er) read on underlying US growth momentum and by then Westpac’s US data surprise index is likely to be at levels that warn the disappointing data cycle is close to completion (see Chart 3)."