NZD/USD has stabilised after falling 10% since August (much of that caused by the election event) and looks around 5% undervalued according to Westpac’s fair value models, according to Imre Speizer, Research Analyst at Westpac.
“Speculative positioning is quite short, so that even if the USD does continue to rise, the NZD/USD response may be muted in the near term.”
“Medium-term though, our view remains negative, resting largely on NZ-US interest rate spread shrinkage persisting into next year.”
“If that proves correct, we should see NZD/USD below 0.67 multi-month.”
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