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26 Aug 2013
Flash: NZD/USD could test 0.7685 this week – Westpac
FXstreet.com (New York) - The NZD/USD continues to consolidate its large May/June decline, stuck inside a 0.7685-0.8135 range, notes Sean Callow, a Global FX Strategist at Westpac.
Key quotes
“Near-term, however, the NZD/USD looks weak and should test the bottom of this range during the week ahead.”
In terms of NZ swaps, “The uptrend in swap yields should take a breather this week. 2yr swaps could correct lower to 3.36% as the RBNZ’s LVR restriction provides some uncertainty around the tightening cycle.”
“August’s US-led steepening is starting to look stretched and vulnerable to a reversal of the NZ curve. Longer term, flattening remains our base case for the months ahead since markets will pre-empt RBNZ tightening to produce a sharper rise at the front end of the curve than at the back.”
Key quotes
“Near-term, however, the NZD/USD looks weak and should test the bottom of this range during the week ahead.”
In terms of NZ swaps, “The uptrend in swap yields should take a breather this week. 2yr swaps could correct lower to 3.36% as the RBNZ’s LVR restriction provides some uncertainty around the tightening cycle.”
“August’s US-led steepening is starting to look stretched and vulnerable to a reversal of the NZ curve. Longer term, flattening remains our base case for the months ahead since markets will pre-empt RBNZ tightening to produce a sharper rise at the front end of the curve than at the back.”