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6 Feb 2015
NZD/USD on its way to 0.68 in 12-m – Rabobank
FXStreet (Edinburgh) - Jane Foley, Senior Currency Strategist at Rabobank, sees the Kiwi dollar losing ground vs. the US dollar, dragging the pair to the 0.68 area in 12-m view.
Key Quotes
“In 2014, the RBNZ hiked rates 4 times. The business cycle was then being propelled higher by the re-build in the wake of the Canterbury earthquake and strength in the dairy sector”.
“The fortunes of diary, however have taken a turn for the worse. This industry represents more than a quarter of New Zealand’s merchandise exports and, while the recent easing in the NZD/USD exchange rate will soften the blow, the fall in the price for dairy coupled with the likely drop in output due to drought will be a sharp blow to revenues”.
“The RBNZ in January dropped its hawkish tone. In view of this and the Fed’s apparent lack of concern about the value of the USD, we extended our bearish NZD/USD view and look for a move towards 0.68 on a 12 mth view”.
Key Quotes
“In 2014, the RBNZ hiked rates 4 times. The business cycle was then being propelled higher by the re-build in the wake of the Canterbury earthquake and strength in the dairy sector”.
“The fortunes of diary, however have taken a turn for the worse. This industry represents more than a quarter of New Zealand’s merchandise exports and, while the recent easing in the NZD/USD exchange rate will soften the blow, the fall in the price for dairy coupled with the likely drop in output due to drought will be a sharp blow to revenues”.
“The RBNZ in January dropped its hawkish tone. In view of this and the Fed’s apparent lack of concern about the value of the USD, we extended our bearish NZD/USD view and look for a move towards 0.68 on a 12 mth view”.