NZD/USD: Election has clearly been a negative factor - Westpac

The NZ election has clearly been a negative factor for NZD/ USD, even after accounting for the usual drivers (such as the US dollar, interest rates, commodities, and risk appetite), explains Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Since the mid-August poll surprise showing a Labour win was possible, NZD/USD has shed 3.5c more than it would otherwise have. Since the 19 Oct government formation, it has shed 1c (after adjusting for usual drivers). The technical target for the week ahead is the 0.6820-0.6900 area.”

“Three months ahead: Our medium term outlook for NZD/USD is largely dependent on the outlook for the US dollar. A persistent rebound in the US dollar by year end could drag NZD/USD lower to the 0.68 area.”