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Imre Speizer, analyst at Westpac, suggests that NZD/USD pair could extend its three-week-old rally to 0.6760 during the week ahead if equity sentiment remains strong and the US dollar fails to fire, but remain bearish beyond that, targeting 0.65 over the next 1-3 months.

Key Quotes

“NZD/USD has been propped up over the past month mostly by a weaker US dollar. There’s plenty of US event risk over the next few weeks to extend or reverse that story, such that the main drivers for NZD/USD are unlikely to be domestic. Indeed, there’s nothing major in the NZ calendar over the next month apart from Q2 CPI on the 16th.”

“The RBNZ MPS on 7 August will be the next big event for NZ markets, with most expecting a rate cut. The case for such was strengthened by this week’s NZIER business confidence survey which fell to a decade low, and indicated the growth slowdown is deeper and more prolonged than we or the RBNZ had expected.”