NZD/USD: watching for markets to price in RBNZ cuts again - Westpac

Analysts at Westpac explained their outlook for NZD/USD.

Key Quotes:

"1 day: Yesterday’s RBNZ-induced acceleration took it into overbought territory, with 0.7230 (June 2015 high) a potential obstacle. We favour consolidation around 0.7150 today.

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 significantly higher than the RBNZ has forecast. The NZ-US interest rate outlook thus argues for a lower NZD/USD, towards 0.6500."