NZD/USD could fall as low as 0.61 – Westpac – FXStreet
NZD/USD is trading at its lowest level in nearly two years at around mid-0.6200. The near term outlook remains bearish, with potential to reach 0.6230 and possibly 0.6100, economists at Westpac report.
“NZD/USD’s downward correction since early April can extend further, the USD remaining supported by the Fed’s tightening cycle as well as broad-based risk-aversion. The next technical target is 0.6230, with 0.6100 a possibility.
“Today’s RBNZ inflation expectation survey for Q2 revealed some slowing in some indicators. Notably, the 2yr-ahead measure remained unchanged, as did the 10yr-ahead measure, suggesting expectations may be at or near a peak.”
“Multi-month, we retain a bullish outlook, targeting 0.7000 by year end. Fed pricing should start to stabilise in the latter part of this year, and NZ commodities are expected to become a major driver of the NZD.”
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EUR/USD has advanced above 1.0400 in the American session on Friday after having touched its lowest level in more than five years at 1.0350. The risk-positive market environment causes the greenback to lose its appeal and week-end flows into the London fix seem to be helping the pair edge higher.
GBP/USD has staged a modest rebound and climbed above 1.2200 toward the end of the European session on Friday. On a weekly basis, the pair is still down nearly 200 pips and the latest price action seems to be driven by profit-taking ahead of the weekend.
Gold bottomed at $1,799 on Friday, the lowest level since February. A recovery followed later that found resistance quickly at $1,820. The yellow metal remains under pressure.
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May 13, 2022 at 05:52PM