FX Strategists at UOB Group noted the Kiwi Dollar is expected to move within the prevailing sideline theme in the next weeks.
Key Quotes
24-hour view: “The ‘target’ indicated at 0.6490 yesterday was not met as NZD rebounded quickly after touching a low of 0.6503. While downward pressure has eased with the rebound, it is too early to expect a sustained recovery. NZD is more likely to consolidate and trade sideways, likely within a 0.6505/0.6555 range”.
Next 1-3 weeks: “While the decline in NZD yesterday was relatively large (NY close of 0.6523, -0.45%), the registered low of 0.6519 is comfortably above the bottom of our expected 0.6490/0.6620 consolidation range. That said, the underlying tone has clearly weakened and a dip below 0.6490 is not ruled out but at this stage, we do not expect a sustained decline below this level. In other words, we continue to expect NZD to trade sideways, likely within a 0.6490/0.6580 range (narrower than the 0.6490/0.6620 range expected previously). Looking ahead, a clear break 0.6490 would suggest that NZD is ready to tackle the next support at 0.6460″.
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