Tips on trading NZD from Westpac
Westpac turns off from the beaten trail and suggests to trade NZD/CHF instead of NZD/USD. The kiwi may appreciate in near-term as overall economic activity remains strong across all sectors in New Zealand. Confidence among businesses and consumers doesn’t fade away, and the dairy sector shows green shoots. Despite all these factors NZD may fall in relation to USD because of the looming threat of the RBNZ’ rate cut in November and anticipated rate hike from the Fed. That’s why the Australian bank believes that buying NZD/CHF is safer than NZD/USD (it buys NZD/CHF at 0.7080 with a stop at 0.6995).
The inflation data for New Zealand surprised markets yesterday with a stronger than expected print of 0.2%. This lifted the kiwi in relation to other currencies across the trading desk. But the recent bounce in NZD’s movement shouldn’t last long as rate cut expectations continued to build ahead of the RBNZ meeting. So, the decision to trade NZD/CHF instead of NZD/USD could be wise.