NZD/USD: Equity markets to cause the break of the 0.64-0.65 range – Westpac

The kiwi is trading in the 0.64-0.65 range, currently sitting at 0.6458, and needs to break any of that levels to find direction. With next week's RBNZ meeting unexpected to surprise, NZD course will be driven by equity markets, according to economists at Westpac.

Key quotes

“NZD/USD has been in consolidation mode around 0.6450 over the past week and looks neutral for the week ahead. Technically, a break of either 0.6400 (bearish) or 0.6500 (bullish) is required to signal multi-week direction.”

“Absent a surprise from the RBNZ next week (and we don’t expect one), the catalyst for a breakout will probably be global, with equity markets continuing to lead currencies.”

“Today’s NZ GDP data showed a fall of -1.6% in the March quarter, reflecting the impact of the Covid-19 lockdown. The result was weaker than the -1.0% we and the market had expected, but the difference most likely reflects temporary adjustments to account for the lockdown period. The June quarter will be of greater interest to markets, our forecast for that being a 14% fall.”