NZD: Moved far enough - ANZ
|Analysts at ANZ suggest that the squeeze higher in the NZD has been reasonably brutal over the past month.
Key Quotes
“While to some degree the strength was justified as factors leading to the underperformance dissipated (namely expectations for RBNZ rate cuts), we now believe it has moved far enough.”
“The economic surprise index has reached extended levels, and the rates market has flipped (with hikes now priced from late-2019).”
“At the same time, the CAD has fallen in sympathy with the extraordinary weakness in oil. We think this move is over-extended. As such, we recommend selling NZD/CAD at 0.8990 for a target of 0.85. We set a stop at 0.9250.”
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