FXstreet.com (Barcelona) - The NZ-US 10-year spreads have widened to 205bps, however this is the top of their recent range. According to the NAB Analyst Team, “We would position for narrowing of this spread in the near-term.” In addition, by holding a long position on NZGB23s relative to UST23s provides up to 4bps of positive carry and roll over a 1-month period.
“As speculation regarding further quantitative easing from the Fed is renewed we see the NZD/USD finding support.” they add. This may be enough to see the NZD/USD push back up to resistance around 0.8245 in coming sessions.
“Despite the volatility associate with the currency and the upcoming events, over the medium term we see the NZD/USD supported by relative growth and interest rate differentials, and maintain a year-end target of 0.8200.” the Team notes.
“As speculation regarding further quantitative easing from the Fed is renewed we see the NZD/USD finding support.” they add. This may be enough to see the NZD/USD push back up to resistance around 0.8245 in coming sessions.
“Despite the volatility associate with the currency and the upcoming events, over the medium term we see the NZD/USD supported by relative growth and interest rate differentials, and maintain a year-end target of 0.8200.” the Team notes.
