The FX day is well in progress in New Zealand.

Early thoughts from Westpac in NZ (Senior Market Strategist Imre Speizer) - outlook:

For today:

  • AUD/USD: The downside vulnerable, targeting 0.7350 today
  • NZD/USD: The downside remains vulnerable, 0.6499 at risk
  • AUD/NZD: Stalled at 1.1400 which poses a near term obstacle to further upside

The next 1-3 months:

  • AUD/USD: Eventual resumption of the strong US dollar trend should weigh on the AUD during the next few months. The next major downside target is 0.7325.
  • NZD/USD: Having reached 0.6560, we look to our next major downside target at 0.6200 which was a low in July 2009. The two main factors expected to contribute to NZD/USD weakness during the next few months are RBNZ easing (the OCR falling to 2.0% by year end) and Fed tightening (FF mid-point to rise by 25bp in September)
  • AUD/NZD: The RBA will probably remain on hold (albeit with easing risk), while the RBNZ is currently in easing mode. Expected RBA vs RBNZ direction thus favours AUD/NZD over the medium term. The next major target is 1.1580