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Equities have had a torrid performance on Wednesday and the latest bout of risk aversion has taken its toll in the NZD/USD pair as well. The kiwi has potential for further downside to 0.6600 if global sentiment weakens further, according to economists at Westpac.

Key quotes

“The sharp reversal overnight, thanks to a plunge in US and European equities, flips the near-term outlook to negative, targeting 0.6600 over the next day or two.” 

“Further ahead, there’s plenty of event risk (and likely volatility) for the NZD over the next two weeks: NZ labour data, US election and RBNZ.”

“Multi-month, we expect risk sentiment to remain elevated into year-end, supported by unprecedented global central bank and government stimulus, and the USD to remain in a downtrend. That should see NZD/USD above 0.68 by year-end.”