Forex Flash: NZD/USD strategy profile – Westpac

According to the Westpac Strategy Team, “We remain bearish towards the NZD in the short- term, targeting 0.8155 at least, and 0.8050 beyond that. Positioning remains a headwind, with little of the extreme long speculative positioning having been pared back, and the widening NZ drought is now assessed by the RBNZ as worth -0.3% to GDP this year with downside risk.”

In addition, the freshest negative factor however, is the RBNZ’s surprisingly tough stance on the high NZD. At the recent MPS, it presented an alternative scenario whereby it could cut the OCR if the NZD significantly exceeded its forecasts.