Imre Speizer, Senior Market Strategist at Westpac, suggests that the weaker US dollar is helping prop up NZD/USD, counteracting the forces of falling commodity prices. Key Quotes “Also helping, and related to the weaker US dollar, is the spread between NZ and US interest rates which has risen this year. All this should keep NZD/USD inside a 0.6550-0.6800 range during the week ahead. Markets are calmer this week. The turmoil of the past six weeks has subsided but we cannot know for how long. Meantime, the absence of shocks is allowing fundamentals to be reflected in most of the NZD crosses, as well as interest rates. NZD/USD Outlook 1 week: Falling commodity prices and falling NZ interest rates are starting to take their toll on NZD/USD. Moreover, the US dollar is starting to resume its uptrend, allowing NZD/USD to fall. We target 0.6500 this week, a level which provided much support last November. The NZ event calendar during the remainder of this week is minor for markets: PPI (Thu), and consumer confidence (Thu). 3 months: We expect NZD/USD to be lower by mid-2016, targeting 0.62. Our main argument is that the Fed should raise US interest rates further this year but markets have priced almost nothing in. We expect US data momentum to positively surprise markets, pushing US interest rates and the USD higher. In contrast, the RBNZ should ease twice this year, but markets have priced in only one cut. 1 year: Our 1 year ahead forecast is 0.61, based partly on the OCR being cut by another 50bp to 2.0% and the Fed rate to rise further from 0.375% this year.” For more information, read our latest forex news.