NZD/USD likely to target 0.7200 this week - Westpac

Imre Speizer, Senior Market Strategist at Westpac, suggests that the NZD/USD targets 0.7200+ this week.

Key Quotes 

“The RBNZ’s boost last week, via a more upbeat assessment of the domestic and global economies, will probably linger, while the battered US dollar faces fresh headwinds this week: potentially softer retail sales data could weigh and the Fed’s FOMC (Wed) is likely to be either neutral or negative. NZ’s calendar is busy too, headlined by Q1 GDP (Thu) and the dairy auction (Wed). There’s also REINZ housing data (Mon), food prices (Tue), Q1 current account (Wed), and manufacturing PMI and ANZ consumer confidence (Fri).

3 months: We are sticking with our view that NZD/USD will decline later this year, targeting 0.65, based on the assumptions the RBNZ will cut to 2.0% and the Fed will tighten once. That view has been hurt by a soggy US economy in Q1, a seemingly reluctant Fed, and very weak jobs data. However we expect the Fed will see enough evidence of improvements in the labour market by Sep to warrant a hike. That is not fully priced, nor is an RBNZ cut in August. Surprises on both fronts should be NZD/USD negative.

1 year: Our economic fundamentals based forecast is 0.62.”