Market news
28.06.2021, 15:01

NZD/USD: Lingering effects of Fed’s hawkish shift to avoid a rise above 0.7120 - Westpac

FXStreet reports that economists at Westpac are neutral on the NZD/USD pair for the week ahead - expecting the 0.6940-0.7120 range to contain as supportive domestic fundamentals are offset by a strengthened US dollar.

“We are neutral for the week ahead, expecting the 0.6940-0.7120 range to contain.” 

“Domestic fundamentals remain supportive, with NZ-US yield spreads rising due to the RBNZ’s more hawkish outlook (vs the Fed), and NZ commodity prices expected to remain elevated over the rest of this year. Against that, the USD has been strengthened by the recent hawkish shift by the Fed, such strength unlikely to dissipate during the weeks ahead.” 

“By year-end, we expect NZD/USD to be higher, at 0.74. We have reduced that forecast from 0.76, due to the Fed shift, but remain bullish for the above domestic reasons, as well as an expectation global risk sentiment remains elevated as global economic growth recovers further.”

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