NZD/USD to target 0.6730 during the week ahead - Westpac

Imre Speizer, analyst at Westpac, suggests that the NZD/USD pair is likely to target 0.6730 during the week ahead, with offshore events again likely to be the dominant drivers after it has fallen over the past week, largely due to USD strength.

Key Quotes

“From a valuation perspective, there’s not much to see. Our weekly model, which includes yield spreads, commodities, and risk sentiment is very close to actual.”

“The next major NZ data event will be Q4 GDP out on 21 March, which we estimate should have grown by around 0.3%, compared to the RBNZ’s forecast of 0.8%. If our estimate proves closer to the mark, then markets are likely to reprice the chance of an OCR cut within the next year from the current 80%.”

“Multi-month, given our forecast for one last Fed hike in December, we retain a negative medium term bias, targeting 0.66 in Q2. By Q3, we expect to see 0.64.”