NZD/USD to stay elevated - Westpac

NZD/USD remains elevated, despite stretched positioning mainly due to the US dollar’s persistent slide, which if it continues next week will further boost NZD/USD, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Local fundamental news has taken a back seat: dairy prices are broadly stable, and while house price gains are slowing and inflation is weaker than expected, the market won’t really know how the RBNZ is interpreting these until the 10 Aug MPS.”

“Longer term, if NZ-US yield spreads decline towards zero by year end, then NZD/USD should retreat to 0.70 or lower.”