NZD/USD remains directionless, although improved risk sentiment plus Friday’s US jobs data should support it this week.SInce November, NZD/USD has been stuck in a sideways 0.8050-0.8400 range, bouncing around with global sentiment and local fundamentals. Friday’s US jobs report was mixed but weak overall, and may dampen the US dollar during a quiet week ahead. We target a rise towards 0.8430.Longer term, we are bullish. From March, NZ’s strong fundamentals will result in RBNZ rate hikes and the increasing NZ-US interest rate differentials should start to push NZD/USD towards 0.8550 by mid year. The main risks to our longer term outlook are from emerging markets, and that US fundamentals exceed our expectations, causing the US dollar to outperform.
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