NZD/USD bearish below 0.6975 – UOB

The Kiwi dollar could face extra downside pressure on a break below 0.6975, according to the research team at UOB Group.

Key Quotes

“Similar to AUD/USD, the pull-back from last Friday’s 0.7305 high is picking up momentum but only a clear break below 0.6975 would indicate that NZD is ready to head lower towards 0.6920 and beyond. In the meanwhile, we hold a neutral view but unless this pair can reclaim 0.7170, the downside risk would continue to increase”.

“Meanwhile, the RBNZ reiterated that further interest rate cuts may be on the cards amid New Zealand’s soft inflation environment, but admitted that housing still poses a risk to financial stability. As far as what the RBNZ will do next, we are still keeping to our call for one more 25bps rate cut ahead. There is no meeting in July and the August interest rate decision will be accompanied by a Monetary Policy Statement (MPS) , allowing the RBNZ to fully explain their thinking”.