NZD/USD corrective rebound persists - Westpac

NZD/USD remains in upward correction mode, targeting the 0.7050-0.7100 area next, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Rationale for the rise includes NZD/USD’s undervaluation, plus speculators’ extreme short positioning.”

“The NZ data calendar highlights during the month ahead include Q3 GDP (Thu), which we expect to rise 0.4% (or 2.2%yr); plus Q4 CPI on 25 Jan which should rise a tad to 2.0%.”

“Three months ahead: Our medium term outlook for NZD/USD remains largely dependent on the outlook for the US dollar. A persistent rebound in the US dollar should drag NZD/USD lower to the 0.67 area during the next few months.”