NZD: Composition of government to cause a kneejerk response - Westpac

The announcement of the government composition (probably during the next day or two) will probably cause a kneejerk response in the NZD - up for National, down for Labour – after which the direction of the US dollar will dominate, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Should the US dollar consolidate further next week, then NZD/USD could rise as far as 0.7200.”

“Further ahead, we remain of the view that NZD/USD will fall below 0.7000 by year end, driven by a continuing decline in NZ-US interest rate spreads.”