NZDUSD: Looking destined to trade above 0.7500 next week - Westpac

Imre Speizer, Research Analyst at Westpac, suggests that after the NZD/USD reached 0.7486 on Wed which is a 16-month high for the pair and is looking destined to trade above 0.7500 next week.

Key Quotes

“We target 0.78 during the month ahead, an area which capped the NZD a year ago.

The sharp rebound in dairy prices over the past six weeks (WMP up 34%) is surely a factor, in addition to the faltering US dollar and strong global capital flows. That close relationship between commodity prices and the NZD is illustrated by the rise in fair value matching the rise in NZD/USD recently.

Event risk:

• The highlight of NZ’s busy data calendar next week is the Q2 GDP release on Thursday. It should show the economy in rude health, with 1% q/q and 3.5% y/y broad-based growth rates. The Q2 current account deficit (Wed) should narrow further to 2.6% GDP – the smallest since Sep 2014. There’s also manufacturing PMI (Thu) and ANZ consumer confidence (Fri) to watch.”