NZD/USD outlook this week - Westpac

Analysts at Westpac noted that the US dollar continues to strengthen - up 4.2% since 3 May - pushing NZD/USD lower.

Key Quotes:

"This defacto loosening has caused the market to back off the view the RBNZ will cut in June, but at only a 20% chance NZ short-end rates probably won’t rise much further ahead of the meeting on the 9th. That should allow the NZD to fall a bit faster if the US dollar continues to rise. We target sub-0.6650 this week.

The NZ calendar is of minor interest: business confidence (ANZ,Tue), as well as a growth gauge, also contains inflation expectations components. The GDT dairy auction is on Wed.

The US calendar is more important, May non-farm payrolls on Fri posing downside risks for the US dollar. Striking Verizon workers and auto supply disruptions caused by Japan’s Kumamoto earthquake could produce an underwhelming result, swaying the Fed away from hiking in June."