NZD/USD seen grinding lower to 0.6700 – Westpac

The Kiwi dollar is expected to regain downside pressure and to re-test the 0.6700 area, according to Imre Spezer, Strategist at Westpac.

Key Quotes

“Since the Brexit vote NZD/USD has fluctuated in a 0.7000-0.7300 range and appears to be hostage to the daily gyrations in global sentiment”.

“The macroeconomic data flow remains supportive, apart from inflation indicators which remain very weak. However the latter, plus global risks and a well above forecast NZD TWI, should push the RBNZ into an August rate cut. We are thus neutral on NZD/USD for the week ahead”.

“Further out, global uncertainty combined with the RBNZ’s easy stance should act as headwinds countering yield-hungry inflows and we see NZD/USD eventually closer to 0.6700”.