NZD: Good amount of enthusiasm - Westpac

Analysts at Westpac suggests that if anything conviction levels on the USD and NZD have firmed and their model score drives a good amount of the NZD enthusiasm, led by steady gains in dairy prices.

Key Quotes

“NZ has a new PM this week in Bill English (former Dep. PM and FM) but we don’t expected any major changes to policy in the near term. The week ahead will see a good amount of economic news, with a couple of consumer confidence surveys, PMIs, and building and manufacturing partials to Q3 GDP (22 Dec). We estimate Q3 GDP at a decent 3.6% yoy, above the 2.9% average of the past five years. The GDT dairy auction will be interesting, given a 90% gain in WMP since Feb, futures pricing signaling a further 2% gain. Overall, the solid economic story continues, which should push NZD/USD above 0.7200 as long as the US dollar stalls or declines.”

“We leave a buy order at 0.7130, stop 0.7060.”