NZD/USD outlook: below 0.7000 - Westpac

Analysts at Westpac offered their outlook for NZD/USD.

Key Quotes:

"1 week:

NZD/USD has accelerated downwards, driven by raised expectations the Fed will hike on 15 March as well as RBNZ reiteration it does not intend hiking during the next two years. During the week ahead the decline could easily extend into the 0.6860- 0.7000 area.

This week’s NZ data releases are again lightweight for markets: building permits (Mon), Q4 manufacturing activity (Wed), and electronic retail spending (Fri). RBNZ Governor Wheeler speaks again on Tue but it’s private. More importantly, the first GDT dairy auction of the month will be on Tue night, with whole milk powder futures pricing an 8% fall to the $2900 area. Such an outcome would be fundamentally unsurprising, given supply both domestically and internationally has started to recover, but should help cap the NZD nonetheless.

3 months:

The strengthening US economy and commensurate rise in US interest rates should help push NZD/USD below 0.70. However much depends on how reflationary and trade-disturbant the Trump Administration’s policies will be."