Forex Flash: US fiscal cliff agreement can spare NZD of shock – Westpac

FXstreet.com (Barcelona) - "An eventual US fiscal agreement should ultimately avoid the sharpest of possible shocks for the NZDUSD, however in the interim there will be setbacks. An agreement on Greece is expected as early as tomorrow, but we expect it to be piecemeal and not address the country's long term funding needs. Our reading of these issues gives us comfort in fading any strength in risk assets during the next few weeks." writes Global Strategist Imre Speizer at Westpac.

As for the NZ economy, there is strong evidence that it hit a pothole in Q3 2012. According to Speizer, "Our data pulse model, which depicts whether economic momentum is rising or falling, illustrates the slump. There are several Q3 data releases yet to come, GDP on 20 Dec noteworthy. Despite the Q3 soft patch being both dated and widely acknowledged, there remains potential for NZD selling in response to the remaining releases."