Westpac Research notes:NZD/USD 1 day: The 0.7175-0.7190 support area has given way easily, which should cap the NZD longer term. Most eyes will now turn to 0.70 though consolidation around 0.71 should be in order today at least.NZD/USD 1-3 month: Multi-month, we expect the US dollar uptrend to resume with stronger US data in Q2 and Q3 and therefore expect NZD/USD to continue to fall. Apart from the US dollar story there are negative local factors to watch out for, particularly low inflation during much of 2015, plus the RBNZ’s conditional easing bias. One of its conditions – softer wage inflation – has arguably already been met, while inflation expectations are softening too. That leaves domestic demand activity (which remains robust) to be ticked before the RBNZ can contemplate easing. However, the steady hand we expect at the June MPS should provide at least a period of demand for NZD mid-month.
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