NZD/USD: Bearish outlook - Rabobank

NZD/USD received a significant boost on the announcement that Adrian Orr would be the new Governor of the RBNZ, points out Jane Foley, Senior FX Strategist at Rabobank. 

Key Quotes 

“The combination of relief that the new Governor was known to the market, given his position as Chief Executive of the New Zealand Superannuation Fund, and speculation that he may be less dovish than his predecessor led to a flurry of short-covering.  That said with the housing market cooling and measures of food and commodity prices soft, there would appear to be no urgency for the central bank to adjust policy higher.”

“Investors are also likely to be cautious on the NZD given the nationalistic leaning of the new government.  We retain a bearish outlook for NZD/USD and look for a move towards 0.65 on a 12 mth view.”