Forex Flash: NZD/USD may be taken below 0.7800

Forex Flash: NZD/USD may be taken below 0.7800

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Forex Flash: NZD/USD may be taken below 0.7800 - Westpac

FITITOL--> FXstreet.com (Barcelona) - Last week NZD/USD finally broke lower, ending a 3-month trading range. According to Imre Speizer, FX Analyst at Westpac in Auckland, they expect further declines in the Kiwi lie ahead, "which will take the pair below 0.7800" the analyst says.

"The NZD was remarkably resilient during the ensuing six weeks, held inside a narrow sideways range of 0.8060-0.8320. A possible explanation for that resilience was the resurgence of Eurozone financial and political risks, galvanising investment flows into the government bond markets of fiscally sound countries such as Australia and New Zealand" Mr. Speizer explains.

Any near term forecasting of the NZD must therefore pay heed to expectations of risk sentiment, which according to the Westpac analyst has been one of the main contributors depreciating the currency. "On that score, Westpac’s view that the economies of China and the US will slow further into mid-2012 suggests headwinds for sentiment ahead , thus we favour further NZD weakness in such an environment" Imre adds.