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Momentum in the NZ economy has slowed. NZ housing curbs may bite and the US dollar is supported by fundamentals. A break below the 0.6945 level would imply the NZD/USD has further room to the downside, economists at Westpac inform.

The NZ event calendar next week is headlined by the RBNZ Monetary Policy Review

“NZD/USD’s downward correction from the 0.7465 high on 25 Feb may not yet be complete. A break below 0.6945 would confirm such, while a break above 0.7070 would flip us into a near-term bullish stance.”  

“Stepping back from the near-term volatility, we remain bullish NZD/USD, expecting 0.7600 by year-end. The main factors are likely to be a weaker US dollar (due to improving global growth relative to the US) and upbeat global risk sentiment.”  

“Next week’s RBNZ decision is unlikely to ruffle the NZD much if it repeats its familiar policy messages. That said, we’re always mindful of risks in both directions. A dovish scenario would comprise commentary on the negative impact from the government’s recent housing curbs, as well as the slowdown in economic momentum over the past few months. A hawkish scenario (less likely) would note risks that the looming inflation spike could be sustained.”