Central banks a problem for higher beta currencies, like NZD? - Nomura

Ross J Burland FXStreet

Analysts at Nomura explained that among G4 central bank chiefs, Governor Kuroda's stance has not materially changed.

Key Quotes:

"JPY weakness against European G10 FX is in line with our view of monetary policy divergence, and the EUR/JPY appreciation trend may continue in the medium term."

"Heightened focus on financial stability, a shift in global central bank policy and rising longer-end yields should be also a headwind for higher-beta commodity currencies like NZD."

"We recommend long EUR/NZD, targeting a move up to 1.6190.

We also anticipate a re-test of the early June highs in EUR/AUD, while the pace of appreciation is likely to be slower than the swift move up observed in late April/May."

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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