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Forex Flash: Sideways trading week expected for NZD/USD – BNZ

By FXstreet.com,  August 20, 2012, 10:40:00 AM EDT

FXstreet.com (Barcelona) - The NZD/USD drifted back below 0.8100 last week, while the USD finally found some friends. While the firmer USD provided headwinds for the NZD/USD at times, it's worth noting that NZ-US interest rate differentials actually finished the week broadly unchanged.

NZ-US 3-year swap differentials currently sit at 233bps, from 227bps last week. According to Mike Jones, an analyst at BNZ, "A key tenet of our constructive NZD/USD view is that the currency's attractive yield differential will remain in place over the coming 6-9 months. We continue to target 0.8200 by year end."

For this week, there's a steady trickle of NZ data to keep an eye on, although it's pretty much all second-tier prioritization. Tomorrow's quarterly RBNZ survey of expectations will probably be the highlight. "We suspect the NZD/USD is in for a bit more sideways consolidation this week. A convincing break through key support at 0.8020 would likely pave the way for a deeper correction back towards 0.7850." he adds.




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Forex and Currencies

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