Analysts at Westpac offered a forecast for the NZD/USD that recent short up to weekly highs on the RBNZ interest rate decision.NZD/USD: rallied hard to weekly highs on 0.71 handle with RBNZ staying put Key Quotes: NZD/USD 1 day: Elevated risk sentiment and USD weakness are NZD/USD supportive. This morning’s RBNZ MPS should push the pair higher if the OCR is held at 2.25%. But even a cut to 2.0%, if accompanied by guidance the easing cycle is over, could cause a rally by day’s end. NZD/USD 1-3 month: Three months ahead we see markets pricing in further RBNZ easing (we expect a cut to 2.0% in August) and also pricing a greater chance of US Fed rate hikes, not least because the NZD exchange rate is likely to be higher than the RBNZ has forecast. The NZ-US interest rate outlook thus argues for a lower NZD/USD, towards 0.6500.
TenkoFX - Analytics