NZD/USD: watch downside below 0.6930

NZD/USD was consolidated in Asia ahead of the Tokyo open, but the Dec. ANZ business confidence came in higher at 21.7 than the prior 20.5 and the activity outlook was also an improvement at 39.6 vrs prior 37.6, offering the kiwi a slight boost.

NZD/USD has been hit heavily in the absence of support for commodity currencies and the antipodeans on the back of a very strong dollar and the Fed's recent hawkish outlook after they hiked rates by 25bps.

NZD/USD 1 day: Momentum is negative, thanks to the post-FOMC surge in the US dollar’s last week, with the next major multi-day target around the 0.6800 area.

AUD/NZD: neutral / higher longer-term to 1.0650 - Westpac

NZD/USD levels

With spot at 0.6965, below the July lows and well below the 200 dma at 0.7112 that was broken on the Fed, the next levels to the downside are 0.6680.

Analysts at Westpac offered NZD/USD in a 1-3 month outlook:  "Below 0.6930. The US dollar has had an impressive rise since the US election and has potential to rise further during the months ahead. The Fed’s assertive tightening projections plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar. Against that, the NZ economy is strong and dairy prices have risen, but these forces are subservient to the US dollar’s trend."

What will 2017 hold, what corrolations to look for in the Kiwi?