NZD/USD doesn’t “deserve” to go much lower than 0.68/0.69 - BNZ
|According to the Currency Research Team at the Bank of New Zealand,
Key Quotes:
“Market sentiment for the NZD has been poor, evidenced by the near-7% plunge since recently peaking on 12-April, from around USD 0.74 to below USD 0.69. Unjustified net long positioning near the peak has exaggerated the move, alongside the broadly based recovery in the USD.”
“The market was far too positive on the NZD a month or two ago and sentiment for the USD got far too depressed. In terms of fundamental forces, some of the NZD weakness is fair to the extent that we have increased conviction of the RBNZ keeping policy on hold and increased conviction that the Fed will continue along its path of gradually raising interest rates. But a counterforce has been the strength of commodity prices, a supporting factor for the NZD. The bottom line is that we see no good reason to change our NZD forecasts. These show the NZD anchored around the 0.70-0.71 mark for much of the rest of the year which in practice can obviously mean excursions outside of this zone. Our
“We still see strong technical support in a 0.68-0.69 zone. Fundamentally, the NZD doesn’t “deserve” to go much lower than that. Clearly, we can’t rule out a break of the lower edge of that support zone with the Kiwi-bears gathering and the USD still possibly in a mood to recover. But the more the NZD falls, the further it moves away from fundamentals.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.