NZD/USD seen grinding lower to 0.6475 – UOB

FX Strategists at UOB Group remain neutral on the Kiwi Dollar but a decline to 0.6475 still is in the pipeline.

Key Quotes

24-hour view: “We expected NZD to ‘test’ 0.6500 yesterday but added “a clear break of this level seems unlikely”. In line with expectation, NZD touched a low of 0.6501 before trading sideways. We still detect a weak underlying tone and see chance for NZD to dip below 0.7500 but any weakness is not expected to challenge the next support at 0.6475. Resistance is at 0.6535 followed by 0.6550”.

Next 1-3 weeks: “NZD eked out a fresh year-to-date low of 0.6501 yesterday before recovering to end the day largely unchanged (NY close of 0.6525, +0.03%). We have held the same view since last Wednesday (05 Sep, spot at 0.6550) wherein we see scope for further NZD weakness to 0.6475 but are “not convinced that the current weakness can move below 0.6475 in a sustained manner”. On the upside, only a break of 0.6575 would suggest that a short-term low is in place”.