NZD fair value estimate pushed up to 0.7590 - BNZ

Sandeep Kanihama FXStreet Contributor

Jason Wong, Senior Market Strategist at BNZ, suggests that rising risk appetite has pushed their fair value estimate for NZD up to 0.7590, but they still have some doubt over whether it will reach such a height this year.

Key Quotes

“The NZD remains vulnerable to any negative news, with net speculative long positioning remaining near a four-year high. The last time speculative positioning was this one-sided, in April 2013, the NZD fell from 0.86 to 0.77 or around 10% over the subsequent three months.”

“Looking at the week ahead, locally the focus turns to tomorrow’s Q2 CPI release. We expect a soft result of 0.1% q/q and 1.8% y/y (below the RBNZ’s pick back in May of 2.1% y/y, which didn’t have the benefit of knowing the recent tumble in oil prices). While a soft result is widely anticipated, speculative positioning in the NZD has been increasing on the view that the RBNZ will be soon following the Bank of Canada in moving to a tightening bias and then tightening. We don’t buy that view and see the RBNZ maintaining a neutral stance for some time. If anything, inflation is tracking below its projections, given the combination of a stronger NZD and lower oil prices. The CPI data should confirm this view.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD trims some losses, back to 1.1770

EUR/USD remains on the back foot on Thursday, managing to regain some composure and reclaim the 1.1770 region after bottoming out near 1.1740 earlier in the day. The pair’s daily retracement comes as the US Dollar extends its recovery, buoyed by another round of solid US data that has reinforced the Greenback’s underlying strength and kept buyers firmly in control.

GBP/USD bounces off monthly lows near 1.3430

GBP/USD is sliding in tandem with its risk-sensitive peers, drifting back towards the 1.3430 area, its lowest levels in the month. The move reflects a firmer Greenback, supported by another round of solid US data and a somewhat divided FOMC Minutes.

Gold surrenders some gains, back below $5,000

Gold is giving away part of its earlier gains on Thursday, receding to the sub-$5,000 region per troy ounce. The precious metal is finding support from renewed geopolitical tensions in the Middle East and declining US Treasury yields across the curve in a context of further advance in the Greenback.

Ripple slips toward $1.40 despite SG-FORGE tapping protocol for EUR CoinVertible

XRP extends its decline, nearing $1.40 support, as risk appetite fades in the broader market. SG-FORGE’s EUR CoinVertible launches on the XRP Ledger, leveraging the blockchain’s scalability, speed, security, and decentralization.

Hawkish Fed minutes and a market finding its footing

It was green across the board for US Stock market indexes at the close on Wednesday, with most S&P 500 names ending higher, adding 38 points (0.6%) to 6,881 overall. At the GICS sector level, energy led gains, followed by technology and consumer discretionary, while utilities and real estate posted the largest losses.

Injective token surges over 13% following the approval of the mainnet upgrade proposal

Injective price rallies over 13% on Thursday after the network confirmed the approval of its IIP-619 proposal. The green light for the mainnet upgrade has boosted traders’ sentiment, as the upgrade aims to scale Injective’s real-time Ethereum Virtual Machine architecture and enhance its capabilities to support next-generation payments.