NZD/USD set to plunge towards the 0.67 level – Westpac

The NZD/USD pair remains in corrective mode. Economists at Westpac target the 0.6700 during the week ahead as the kiwi will be influenced by local Delta developments.

NZ will be fixated on developments in the local covid outbreak

“Last week’s local covid outbreak has dramatically shifted the market’s expectations of the RBNZ, with the next meeting in October now seen as only a 50% chance. So NZ-US yield spreads have flipped from a support to a weight over the past week.”

“We see potential for 0.6700 during the next few weeks, and beyond that will depend on the length of lockdown.” 

“Something longer than a few weeks will put our 0.7400 year-end forecast at risk of a downgrade.”