Tuesday, September 8, 2015

NZD/USD expected to fall further – TDS

FXStreet (Edinburgh) - In the opinion of strategists at TD Securities, the pair could visit the area of 0.59 by end of next year.

Key Quotes

“Q2 GDP is looking solid (+0.8%/qtr) via consumer spending and housing. Dairy is weak but there are healthy non-dairy exports, so net trade is not as nasty as the headlines suggest”.

“Nevertheless, business and consumer confidence are weak and risk delaying spending, while low oil and slashed ACC levies keep inflation low. The RBNZ can cut to 2.5% by year end, but solid housing and credit growth mitigates sub-2.5% expectations”.

“The RBNZ in June expected the TWI to be 74.7 by now, instead, it is tracking closer to 69. This low exchange rate automatically boosts RBNZ GDP and CPI projections, and should curb market expectations for a fresh record low cash rate of 2%, thereby keeping a floor under the NZD”.

“Recent upbeat dairy auctions also put a floor under the exchange rate. We target $US0.62 by year end, and $US0.59 by end-2016”.
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