In view of Imre Speizer, analyst at Westpac, NZD/USD appears to be in a corrective bounce, following a 5c fall to 0.6269 (lowest since 2015).
Key Quotes
“An end target for this bounce would be the 0.6400-0.6500 area, after which a resumption of the decline is expected towards 0.6200.”
“Fundamentals will continue to weigh on the NZD. GDP data in two weeks’ time should confirm the economic slowdown in NZ. And at its 25 Sep meeting the RBNZ will probably repeat its signal for another rate cut (for November, we expect).”
“In addition, the defensive USD should remain elevated amid the global slowdown and business uncertainty.”
“The main risks to our bearish NZD view are from offshore, such as the Fed lowering its rate by more than the 75bp we expect this year (or signals such) and hurting the USD.”
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