11 Aug 2015
NZD still under downside pressure – BAML
FXStreet (Edinburgh) - The prospects for the Kiwi dollar still point to further pullbacks, according to analysts at BAML.
Key Quotes
“The current market level, weaker terms of trade and RBNZ’s easing bias clearly pose downside risk to our year-end forecast of 0.67. The upcoming 2Q New Zealand labor force report, which could slow markedly to 0.3% qoq in our view, along with potential cut to Fonterra milk payout forecast, should continue to keep downward pressure on NZD”.
“While we remain bearish on NZD, we prefer to give a bit more time to assess upcoming data before making forecast adjustment. In particular, the upcoming July US labor report will be critical for broad dollar performance in our view, as the July FOMC meeting suggests that the Fed is looking for just some further improvement in the labor market before rate hike”.
Key Quotes
“The current market level, weaker terms of trade and RBNZ’s easing bias clearly pose downside risk to our year-end forecast of 0.67. The upcoming 2Q New Zealand labor force report, which could slow markedly to 0.3% qoq in our view, along with potential cut to Fonterra milk payout forecast, should continue to keep downward pressure on NZD”.
“While we remain bearish on NZD, we prefer to give a bit more time to assess upcoming data before making forecast adjustment. In particular, the upcoming July US labor report will be critical for broad dollar performance in our view, as the July FOMC meeting suggests that the Fed is looking for just some further improvement in the labor market before rate hike”.