21 Jul 2015
NZD/USD: headed for 1-2 cent fall? - Westpac
FXStreet (Guatemala) - Analysts at Westpac Banking Corporation explained that they remain short NZD/USD from 0.7225 - shift stop to 0.6722.
Key Quotes:
"The multi-month downtrend continues, and we remain bearish, targeting 0.6400 this week."
"The US is expected to hike rates this year, and NZ economy is losing momentum, dairy prices are still falling, and RBNZ is likely to cut the OCR on Thursday – the only question is whether by 25bp or 50bp. The only obvious argument for a near term bounce is positioning – CFTC reports show NZD/USD futures speculative positioning is at a record low, warning of a sharp short-squeeze eventually."
"Indeed, if the RBNZ cut by 25bp on Thursday but did not explicitly signal further rate cuts, a multi-cent bounce could ensue. We expect a 25bp cut to 3.00%, accompanied by strong guidance, but there is a decent (40%, say) chance of a 50bp move. The former should push the NZD slightly lower but the latter would see a 1-2 cent fall."
Key Quotes:
"The multi-month downtrend continues, and we remain bearish, targeting 0.6400 this week."
"The US is expected to hike rates this year, and NZ economy is losing momentum, dairy prices are still falling, and RBNZ is likely to cut the OCR on Thursday – the only question is whether by 25bp or 50bp. The only obvious argument for a near term bounce is positioning – CFTC reports show NZD/USD futures speculative positioning is at a record low, warning of a sharp short-squeeze eventually."
"Indeed, if the RBNZ cut by 25bp on Thursday but did not explicitly signal further rate cuts, a multi-cent bounce could ensue. We expect a 25bp cut to 3.00%, accompanied by strong guidance, but there is a decent (40%, say) chance of a 50bp move. The former should push the NZD slightly lower but the latter would see a 1-2 cent fall."