NZD/USD speculative positioning is elevated - Westpac

NZD/USD’s six-week old rally has stalled at the mid-0.73s, mostly due to the US dollar’s recent rebound, but positioning has probably also played a part, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“The CFTC report on speculative types shows NZD/USD longs are at a multi-year high – admittedly not yet signalling a reversal but at least a headwind to further gains.”

“The NZD is consolidating around 0.73, but we see risks of a corrective pullback to 0.72 during the week ahead.”

“Longer term, we expect to see NZD/USD lower at 0.68, as long as the Fed sticks to its normalisation path which would see NZ-US interest rate spreads close to zero.”