NZD: Elections uncertainty weighing - Westpac

Imre Speizer, Research Analyst at Westpac points out that the NZD was again the worst performing major currency last week and they suspect election uncertainty, overweight speculative longs, and flickers of life in the US dollar are at play.

Key Quotes

“Polls indicating the election will be close may continue to weigh on the NZD until 23 Sep.”

“This week’s NZ event calendar is second-tier for markets, apart from the GDT dairy auction on Tue where futures are pricing a 3% bounce in WMP prices. Otherwise we have GDP inputs such as Q2 building and Q2 manufacturing.”

‘Three months ahead: Our medium term outlook for NZD/USD is largely dependant 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.”