Weakening USD is pushing NZD/USD higher - Westpac

According to Imre Speizer, Research Analyst at Westpac, the weakening US dollar is pushing NZD/USD higher, targeting the 0.7100 area this week.

Key Quotes

“Also helping are rising dairy prices, higher inflation, and extremely short speculative NZD positioning. The French election result has given the NZD a modest lift.”

“The NZ data calendar is busy with second tier releases this week. Migration and credit card spending are on Wed, and building permits, trade, and ANZ business confidence are on Fri. The business confidence report holds the most market-moving potential, since it also includes inflation related information. Markets will be interested in whether CPI inflation will remain near the RBNZ’s 2% midpoint target, having undershot since 2011.”

“Three months ahead: Multi-month we see potential for the NZD’s ragged decline since September to extend below 0.6900, driven mostly by the resumption of a stronger US dollar. However the late April period could hurt the USD as US government shutdown risks surface.

Ultimately, though, a stronger US economy, rising US interest rates and a strong US dollar are themes which should reappear during the remainder of the year.”