5 Aug 2015
NZD/USD could see 0.62 by year-end – Westpac
FXStreet (Edinburgh) - In the view of Imre Speizer, Strategist at Westpac, the pair could slip towards the 0.62 area by end of 2015.
Key Quotes
“We expect the RBNZ to cut the OCR by another 50bp to 2.5% by year end (with more to come early 2016)”.
“Over the same period, we expect the Fed to hike by 50bp”.
“Such a combination could cause the NZ-US 2yr swap spread to fall by 60bp (from a current level of 190bp)”.
“NZ’s main export commodity, whole milk powder, is expected to fall by another 5% by year end”.
“Plugging these forecasts into a simple short term fair value model for NZD/USD suggests it should fall by 6%, from 0.66 to 0.62”.
Key Quotes
“We expect the RBNZ to cut the OCR by another 50bp to 2.5% by year end (with more to come early 2016)”.
“Over the same period, we expect the Fed to hike by 50bp”.
“Such a combination could cause the NZ-US 2yr swap spread to fall by 60bp (from a current level of 190bp)”.
“NZ’s main export commodity, whole milk powder, is expected to fall by another 5% by year end”.
“Plugging these forecasts into a simple short term fair value model for NZD/USD suggests it should fall by 6%, from 0.66 to 0.62”.