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30 Sep 2013
Flash: Risk to NZD/USD near term, it could fall to 0.8160 - Westpac
FXstreet.com (Barcelona) - NZD/USD may be facing headwinds near term as the US government shutdown looms, notes Imre Speizer, FX Strategist at Westpac, in a research note to clients.
Key Quotes
"If the Democrats and Republicans cannot agree on spending cuts by tonight, parts of the government will shut down until agreement can be reached. Should that agreement take days, then the effect on the US economy will be minor. However, should it take weeks, it would be material."
"We expect it could fall to 0.8160 this week, but as long as that level holds, then a resumption of September’s rally to above 0.8400 is likely."
"NZ fundamentals remain strong, economic momentum has picked up, the RBNZ is expected to start increasing the OCR in March, and speculative NZD/USD positioning is building from a low base. These all argue for a higher NZD/USD by year end."
Key Quotes
"If the Democrats and Republicans cannot agree on spending cuts by tonight, parts of the government will shut down until agreement can be reached. Should that agreement take days, then the effect on the US economy will be minor. However, should it take weeks, it would be material."
"We expect it could fall to 0.8160 this week, but as long as that level holds, then a resumption of September’s rally to above 0.8400 is likely."
"NZ fundamentals remain strong, economic momentum has picked up, the RBNZ is expected to start increasing the OCR in March, and speculative NZD/USD positioning is building from a low base. These all argue for a higher NZD/USD by year end."