Westpac have gone short NZD/USD at $0.6705.....>

KIWI: Westpac have gone short NZD/USD at $0.6705 with a target of $0.6500. They

have a trailing stop, initially set at $0.6800.

- Westpac expect "the RBNZ to cut the OCR by 25bp to 1.25% on 7 August, and

signal the potential for more. We expect a follow-up cut in November to 1.0%,

with a risk this is delivered in September, and the OCR ultimately falls below

1.0%. Domestic activity is weaker than the RBNZ had forecast. Markets are

pricing 20bp of easing in August, and 42bp by November, implying markets should

fall further if our forecasts prove correct. NZ-US yield spreads have explained

much of the NZD's recent gains, but they should soon become a headwind as

markets have priced in plenty for the Fed (100bp) but arguably not enough for

the RBNZ. Technically, NZD/USD's 3c rise since May looks corrective, and may be

giving way to a revisit of May's 0.6500 low."