NZD/USD boosted by US dollar weakness – Westpac

Imre Speizer, Research Analyst at Westpac, notes that the NZD/USD broke above its six-month old trading range recently, following a dovish speech by Fed Chair Yellen.

Key Quotes

“The break above 0.6900 technically signals a move to at least 0.7200 during the next few weeks, a period which contains little scheduled major NZ news (dairy auctions and business
confidence the notable exceptions).

That should allow global events to dominate NZD/USD, in particular those which influence the US dollar. Much of the strength in NZD/USD since January can be explained by the weakness in the USD over that period.

The traditional short term drivers, such as NZ-US interest rate spreads and commodity prices have in contrast been pointing downwards this year.”