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NZD/USD heading for 0.68 handle?


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FXStreet (Guatemala) – Currently trading at 0.7271, NZD/USD is wearing last night’s policy statement from the RBNZ who back tracked from their hawkish stance and moved into neutral suggesting that they will keep rates on hold for some time to come.

The bird slid through the 0.73 handle with ease overnight having lost the support 0.7320 and reached 0.7234 the low before drifting up into the Asian session where the pair is consolidated and up to 0.7280 where resistance lies. Jane Foley, Senior Currency Strategist at Rabobank, explained that the justification for this shift was the recognition that annual inflation is likely to be below the target band through 2015 and could even be negative for a period before moving back towards 2% “albeit more gradually than previously anticipated”. “The Bank also reiterated the now familiar mantra that the value of the NZD was too high and “unjustified in terms of current economic conditions particularly exports and unsustainable in terms of New Zealand’s economic fundamentals”.”


NZD/USD 0.68 12 month view


Jane Foley at Rabobank added, “In view of the change in the RBNZ tone last night and the Fed’s apparent lack of concern about the value of the USD, we have extended our bearish NZD and look for a move towards 0.68 on a 12 mth view.”