NZD/USD more likely to test 0.7000 during the week ahead - Westpac

Imre Speizer, Research Analyst at Westpac, notes that the NZD/USD could not sustain a break above 0.7300, despite several attempts, and now looks more likely to test 0.7000 during the week ahead.

Key Quotes 

“Depressive factors are likely to be today’s weak Q2 CPI data, the RBNZ interim “economic assessment” on Thu, and a resurgent US dollar. The highlight’s of NZ’s economic calendar this week were Q2 CPI - just released - and this Thursday’s RBNZ assessment. We expect the RBNZ will lean towards (if not actually deliver) an easing signal, priming markets for a cut on 11 August.

3 months: We target 0.67, based on a stronger US dollar and the RBNZ cutting to 2.0%. Even if the Fed doesn’t tighten this year, Brexit contagion and more general global risks should support the US dollar for safe-haven reasons.

1 year: Our economic fundamentals based forecast is 0.63.”