NZD/USD: Bearish for the week ahead – Westpac

Global sentiment rolling over, and the RBNZ’s dovish hints on the OCR yesterday, will weigh on the NZD during the week ahead, economists at Westpac apprise.

Key quotes

“NZD/USD is testing the lower bound of a two-month-old channel. Should it break, a multi-week target of 0.5800 would be signalled.”

“The RBNZ MPS was negative for the NZD. The RBNZ’s openness to a negative OCR if needed in future, has caused markets to price a 50% chance of that happening by mid-2021.”

“Today’s Budget revealed the Treasury expects net core crown debt to rise to 54% of GDP by 2023 – slightly higher than the 50% we had expected. The NZD reaction to the announcement was negligible, but if anything, it’s slightly supportive.”

“We remain bearish the NZD for the week ahead.”