NZD/USD could easily reach 0.7050 - Westpac

NZD/USD’s corrective bounce is now two weeks old, and although gradual, shows no signs of abating and technically, it could easily reach 0.7050 – the Oct low, and roughly a 62% retracement, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Helping such a move may be today’s RBNZ MPS statement, which was more bullish on growth than many private sector analysts would be. It also nudged the OCR forecast in an upward direction, encouraging swap markets to price in a faster pace of tightening - as distant as it may be. That is why the swap curve steepened on the hawkish surprise (typically it would have bear-flattened).”

“Eventually, though, we expect the USD rally to dominate and push NZD/USD towards 0.67 during the next few months.”