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    NZD/USD received a large shot in the arm from the RBNZ - Westpac Sandeep Kanihama

    Imre Speizer, Research Analyst at Westpac, notes that the NZD/USD received a large shot in the arm from the RBNZ’s on-hold decision yesterday, leading some in the market to speculate the easing cycle may be over.Key Quotes“Market pricing for August implies only a 36% chance of a cut then, compared to over 60% just before the announcement. And the chance of one more cut at any meeting over the next two years is 88%.Combined with the US dollar’s newfound weakness, the above argues for further NZD/USD strength during the weeks ahead. We target 0.7200 . Multi-month, though, if the Fed hikes in September as we expect, then NZD/USD should succumb to a declining interest rate advantage, and fall back into the 0.60s.”

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