Having been the top G10 performer on Friday, NZD/USD awaits fresh clues to extend its latest recovery as it takes the rounds to 0.6418 at the start of Monday’s Asian session.
In spite of no major boost from New Zealand, the Kiwi pair managed to outperform its major counterparts as expectations of the US-China trade negotiations in October, coupled with a late-September US visit by Chinese deputies, joined downbeat Nonfarm Payrolls data from the US.
While the current week has fewer catalysts from New Zealand, Australia and New Zealand Banking Group (ANZ) holds its bearish bias towards 0.25% Official Cash Rate (OCR) by the end of 2020. They offer seven reasons supporting their expectations, such as “near-term growth indicators are inconsistent with RBNZ projections, inflation expectations are slipping, our Australian colleagues foresee similar cuts by the RBA which will put pressure on NZ financial conditions, a softer global growth environment, the labour market outlook, the RBNZ bank capital proposals (the May cut is a placeholder until we know the details – not that we can add many more cuts in when we do), and the deteriorating outlook for the dairy sector.”
NZD/USD LONG (Buy)
ENTER AT: 0.6421