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The Kiwi dollar could depreciate to the 0.6320 region vs. the greenback in the near-term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected NZD to ‘move below last week’s 0.6378 low’ yesterday but were of the view ‘a sustained drop below this level appears unlikely’. NZD subsequently dipped to 0.6371 before recovering slightly. While downward momentum is patchy at best, the current weakness is not showing sign of stabilizing just yet. For today, there is room for NZD to edge downwards to 0.6365 first before a more sustained recovery can be expected. Resistance is at 0.6400 followed by 0.6420.”

Next 1-3 weeks: “We highlighted yesterday (18 Feb, spot at 0.6440) that NZD ‘has likely moved into a consolidation phase’ and expected it ‘to trade between 0.6375 and 0.6485’. The subsequent sharp drop of -0.76% (NY close of 0.6386) came as a surprise. The downside risk has clearly increased but NZD has to register a NY closing below the solid 0.6375 support or the next level at 0.6325 may not come into the picture. All in, the current downward pressure would continue to increase unless NZD can move and stay above 0.6440 within these few days.”