NZD/USD capped by election uncertainty - Westpac

NZD/USD has ranged between 0.7200 and 0.7350 during the past few weeks, capped by election uncertainty, and supported by the downward trend in the US dollar, notes Imre Speizer, Research Analyst at Westpac.

Key Quotes

“A breakout next Monday is possible, the direction depending on the election outcome. Recently, the NZD has fallen on polls showing Labour gains, and risen on National gains.”

This week’s NZ data highlight will be the Q2 GDP release (Thu). There’s also the Q2 BoP (Wed), Westpac consumer confidence (Tue), and a GDT dairy auction (Tue) to watch. The election on Sat will set the tone for Monday morning.

“Three months ahead: Our medium term outlook for NZD/USD is largely dependent on the outlook for the US dollar. A persistent rebound in the US dollar by year end is needed to pull NZD/ USD back to the 0.70 area.”