NZD/USD Outlook: Up this week
We retain our positive bias for another week but remain negative one month out and beyond. Fed tapering fears have receded for now, pushing the US dollar lower, and in turn, NZD/USD higher. In addition, speculative NZD/USD futures positioning has swung from a record long state to short, and is now vulnerable to a short squeeze (Chart 3). We have also noticed increased inflows from offshore into NZGBs during the past week. Technical momentum has swung to the upside and implies a near term rally to the 0.8000-0.8200 area. Further out, we expect to see it in the low 0.70’s by year end.
Read the full report: FX Research
Westpac