NZDUSD bullish with 0.7175 in sight – Westpac

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 19, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Delhi) – Imre Speizer, Senior Markets Strategist at Westpac, suggests that he remain bullish over a one-month horizon, targeting 0.7175 (which was the 3 Feb low). Any corrective pullbacks should be contained by 0.6740.

    Key Quotes

    “Dairy prices are tipped by whole milk powder futures to rise slightly further, the near term economic data pulse has picked up, and the RBNZ last week signalled discomfort with taking the OCR below 2.5%. In addition, NZD/USD is around 9% undervalued relative to movements in commodities, interest rates and risk sentiment.”

    “The NZ data calendar is unlikely to ruffle markets: services PMI (Mon), migration and credit card spending (Wed). However the GDT dairy auction will, as always, be closely watched. NZX futures are currently predicting only a 5% rise in WMP prices, suggesting the impressive rally since August is mature.”

    3 months ahead: Multi-month, we see the NZ economy slowing, the RBNZ easing in December, and the Fed possibly tightening during the next few months, taking NZD/USD to 0.62. That said, any further delays in Fed tightening will cast doubt on our forecast decline in the NZD/USD.

    1 year ahead: Our 1 year ahead forecast is 0.62, based partly on the OCR being cut to 2.0%.
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