FXStreet (Delhi) - Imre Speizer, Senior Markets Strategist at Westpac, suggests that we remain bearish on the NZD and target a break below 0.6235 this week which would take it to a fresh six-year low (ignoring the blip on 24 Aug) and resume the downtrend.
Key Quotes
“While dairy prices have rebounded from a multidecade low, global risk aversion and the likelihood the RBNZ will cut the OCR again in December should limit any short term rallies during the weeks ahead to 0.6500.”
"3 months ahead: The next major target area is 0.62, a level which provided support during the middle of 2009. If that gave way, we would target 0.60. The two main factors expected to contribute to NZD/USD weakness during the next few months are RBNZ easing (we expect the OCR to fall to 2.5% by year end and eventually to 2.0%) and eventual Fed tightening. The RBNZ has opened the door to an OCR below 2.5%, courtesy of its “downside scenario” discussion in the September Monetary Policy Statement, China and drought risks being major concerns."
"1 year ahead: Our 1 year ahead forecast is 0.62, based on the NZ economy benefitting from the RBNZ’s easing cycle."
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