WPAC on the New Zealand dollar, saying the break under 0.6520 is more reason to be bearish and it signals 0.6300.
Recent events have been negative for the NZD:
- the Auckland region lockdown,
- and the dovish shift by the RBNZ last week. On that shift, the RBNZ expanded its QE program, and signalled a lower OCR/low-cost bank loan package could be ready by November for potential deployment. NZ interest rates have fallen, and will probably continue to do so since markets have so far priced a 30bp fall - well short of the 75bp cut Westpac is forecasting.
WPAC add a better short than NZ/US is NZD against AUD:
- NZD/USD falls may be limited since we remain bearish on the USD.
- Greater underperformance will be seen vs the AUD.
