18 Jun 2015
NZD/USD dips post Q1 GDP data, More RBNZ easing in sight – Westpac
FXStreet (Barcelona) - The Westpac Team reviews the NZD/USD performance post the FOMC and the soft New Zealand Q1 GDP data release, and further expects the RBNZ to ease further in July.
Key Quotes
“NZD/USD dipped as low as 0.6881 around the initial FOMC headlines, bounced to a 0.7012 high then eased back to 0.6970 when the Q1 New Zealand GDP report hit screens. This produced a large downside surprise, 0.2% q/q versus a median of 0.6% and with Q4 revised down from 0.8% to 0.7%. The kiwi slid to 0.6915, sparking a rally in AUD/NZD from 1.1110 to 1.1180.”
“Markets now price a 60% chance of another RBNZ cut to 3.00% on 23 July, extending to 2.90% by the Dec 2015 meeting. Our NZ economists have changed their view on the RBNZ cash rate from a Sep OCR cut to July and "are seriously considering forecasting further OCR cuts beyond July”."
Key Quotes
“NZD/USD dipped as low as 0.6881 around the initial FOMC headlines, bounced to a 0.7012 high then eased back to 0.6970 when the Q1 New Zealand GDP report hit screens. This produced a large downside surprise, 0.2% q/q versus a median of 0.6% and with Q4 revised down from 0.8% to 0.7%. The kiwi slid to 0.6915, sparking a rally in AUD/NZD from 1.1110 to 1.1180.”
“Markets now price a 60% chance of another RBNZ cut to 3.00% on 23 July, extending to 2.90% by the Dec 2015 meeting. Our NZ economists have changed their view on the RBNZ cash rate from a Sep OCR cut to July and "are seriously considering forecasting further OCR cuts beyond July”."