NZD/USD: comments from Westpac
NZD/USD opened today with a 13-pip gap down as New Zealand’s trade balance switched from surplus to deficit – this is a very negative piece of news, but then recovered to $0.7846.
Westpac: “The NZD continues to consolidate its large May/June decline, stuck inside a 0.7685/8135 range. Near term, however, the currency looks weak and should test the bottom of this range during the week ahead. The main reason for this is likely to be continuing market expectations the Fed will start tapering QE in September. If tapering is announced in September and is significant in magnitude, NZD/USD will probably break below $0.7685 towards the low $0.70’s. Alternatively, if the Fed disappoints the taperists, then the NZD/USD will rebound to the $0.8400/8500 area.”
Chart. Daily NZD/USD