NZD/USD: Potential for one last dip below 0.65 – Westpac

The US dollar likely to continue trending higher as Fed tightening is priced while yield spreads are set to hurt NZD/USD. Economists at Westpac see potential to 0.6500 multi-week.

USD yield support over the long run

“We retain a strong US dollar outlook, based on expected Fed policy tightening.”

“NZD has solid fundamental backing, but the RBNZ cycle is now fully priced and USD movements are likely to dominate.”

“Yield spreads are unlikely to be helpful. NZD/USD could weaken slightly further during the months ahead to 0.6500.”