According to the BNZ Research Team from the National Australia Bank, the NZD/USD pair is long overdue for a consolidation but they still see risks tilted to the downside.
Key Quotes:
“The NZD was one of the weakest of the major currencies, reflecting its tight relationship with the CNY since the trade war began early last year. The weaker outlook for global growth pushed most industrial and agricultural prices lower and commodity currencies underperformed. The 50bps rate cut added to downside pressure for the NZD. NZD/USD fell by 3.8% to 0.6310, touching its lowest level since 2015 of 0.6283 in the process.
“After a 7% plunge since mid-July, some consolidation is overdue and a pop up on positive news is possible. But with the trade war and slower growth, fundamental headwinds remain and we target a 0.60-0.63 range towards year-end.”
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