Currency talk: NZ dollar poised to push above 70c against the US dollar
Jason Walls and Westpac senior market strategist Imre Speizer discuss the global currency market news on NBR Radio and on demand on MyNBR Radio.
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Even more positive economic news out of New Zealand, coupled with some soft data from the US, has led to the NZ dollar gaining more momentum against the greenback.
Westpac senior market strategist Imre Speizer is picking the kiwi to push 71c against the greenback over the next month.
“The economic news in New Zealand has been good lately,” he says.
As well as dairy prices shifting up – with prices at the GlobalDairyTrade auction increasing in four consecutive auctions – Mr Speizer says the housing market has continued to go “gangbusters.”
He says migration is also increasing.
But one of the biggest factors pushing the kiwi up against the US is what’s happening with the respective countries’ interest rates.
The market has begun pricing a rate hike in the US in December while also pricing a rate cut by the Reserve Bank in October.
“The [Reserve Bank] can’t explicitly walk away from its explicit signal that it's going to cut the OCR to 2.5%,” he says.
“But what it can do is just water it down and say 'things have actually improved quite a bit, we will probably still cut but we will see how things go'.”
On the flipside, the softer data from the US has led to analysts saying a December rate hike is no longer likely.
The US Fed’s “procrastination,” as Mr Speizer calls it, will mean the Reserve Bank of Australia may have to revise down its official cash rate.
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NBR Radio
Tue, 20 Oct 2015
Tue, 20 Oct 2015
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Currency talk: NZ dollar poised to push above 70c against the US dollar
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