NZD/USD: Medium term bearish outlook - Westpac

Imre Speizer, Research Analyst at Westpac, explains that the resurgent US dollar has stalled, allowing the heavily-shorted NZD/USD to stabilise in a 0.6425-0.6500 range.

Key Quotes

“With fair value around 0.68, and positioning extremely short, we had expected this corrective bounce to run to 0.6600. However, the past week’s plunge in equity markets has introduced a fresh negative for the NZD. Were it to persist, then a test of 0.6425 would be likely.”

“Medium term, we remain bearish, based on our Fed/US economy-based expectation that the USD will rise further, and we continue to target 0.64 or below by year end.”