NZD/USD Outlook: Down this week
We continue to hold a negative view of NZD/USD. The two month old decline in NZD/USD remains intact, targeting the 0.8200 area next. We suspect that even if the RBNZ MPS is a hawkish surprise to the interest rate markets, the NZD will remain downtrodden. NZ economic momentum has certainly slowed (Chart 2) and markets will remain skeptical the RBNZ will deliver the OCR increases which have been projected. Conversely, the US dollar continues to strengthen, supported by economic data surprises (Chart 3). By year end, we would expect to see NZD/USD in the 0.80-0.82 area.
Read the full report: FX Research