Forex Flash: NZD/USD approaches 0.7950 as trends look to continue – Westpac
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NZD/USD
FXstreet.com (Barcelona) - According to the Westpac Analyst Team, "The waning expectations for QE3 and improved US data continue to take its toll on the NZD. Should that dynamic extend into this week, we see the NZD easily reaching 0.7950."
In regards to NZ yields, "whatever the international influences, a less than buoyant macro picture will continue to cap 2-year yields. In addition, a flattening trade beckons once the 2-10 year swap curve steepens to 120-125bps." writes the Analyst team.
In Europe, the core government bond markets have remained under pressure in relatively thin trading conditions. Expectations for game changing ECB policy action continues to grow, while, in contrast, the perception is increasingly that the Fed might remain on hold in the short term. "We are skeptical of both views, suggesting that the upside for yields is now limited." they write.
In regards to NZ yields, "whatever the international influences, a less than buoyant macro picture will continue to cap 2-year yields. In addition, a flattening trade beckons once the 2-10 year swap curve steepens to 120-125bps." writes the Analyst team.
In Europe, the core government bond markets have remained under pressure in relatively thin trading conditions. Expectations for game changing ECB policy action continues to grow, while, in contrast, the perception is increasingly that the Fed might remain on hold in the short term. "We are skeptical of both views, suggesting that the upside for yields is now limited." they write.
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