Flash; NZD/USD, CPI key event risk - NAB

FXstreet.com (Barcelona) - As the NZD/USD extends its 1-month consolidation following sharp losses in May and June, the NAB FX Strategy Team remains of the view that "additional steep falls are unlikely, with the currency more likely to spend the remainder of the year in a sideways range" the Strategist at the Bank note.

Fundamentally speaking, Q2 CPI is the key risk facing the Kiwi this Tuesday. According to NAB Strategists, "With another weak inflation number expected (0.3%q/q, 0.8%y/y), we doubt this will be prove to be catalyst for a bounce in the NZD." In fact, NAB believes that if anything, "confirmation of another CPI print below the RBNZ’s 1-3% target band may encourage OIS markets to trim the 50bps worth of hikes now priced into the curve" the NAB FX Team said.