Forex Flash: NZ strategy profile, NZD/USD targeting 0.8475 – Westpac
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NZD/USD
FXstreet.com (Barcelona) - According to the Westpac Strategy Team, "The multi-month outlook for the NZDUSD outlook remains positive, targeting the 0.8475 level, however extreme long positioning plus a dovish RBNZ on Thursday could provide better buying levels this week. This is contingent is as long on the key 0.8215 level continuing to hold however."
In terms of NZ swaps, the positive trend in NZ 2yr yields persists and there is now good support in the 2.75%-2.80% area (which may be visited if the RBNZ softens its tone on inflation this week) - longer term, we target 2.94% next.
Finally, the NZ curve remains stuck inside a multi-month range. "Within that, the 2-10yr swap curve could steepen near term to 114bp, particularly if the RBNZ is dovish on Thursday and the global backdrop remains positive." the team notes.
In terms of NZ swaps, the positive trend in NZ 2yr yields persists and there is now good support in the 2.75%-2.80% area (which may be visited if the RBNZ softens its tone on inflation this week) - longer term, we target 2.94% next.
Finally, the NZ curve remains stuck inside a multi-month range. "Within that, the 2-10yr swap curve could steepen near term to 114bp, particularly if the RBNZ is dovish on Thursday and the global backdrop remains positive." the team notes.
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