NZD/USD on its way to 0.7050? – Westpac

The Kiwi dollar could appreciate towards the mid-0.7000s, according to strategists at Westpac.

Key Quotes

“The US dollar is under renewed selling pressure, pushing NZD/USD higher towards 0.7050”.

“That level marked a double top in April and May, but looks vulnerable now. That is because the shockingly weak US payrolls report released last Friday has caused markets to completely abandon the idea of a Fed rate hike in June, weakening the US dollar in the process”.

“We expect such sentiment to linger this week. In addition, the RBNZ’s MPS on Thu, while a close call, is expected to result in an on hold decision”.

“If there is any sense the RBNZ may be reluctant to deliver the final rate cut in this easing cycle, then markets will buy the NZD in response. Beyond 0.7050 we would target 0.7200”.