6 Mar 2015
NZD/USD: Maintaining a cautiously short bias - ANZ
FXStreet (Bali) - Sam Tuck, FX Strategist at ANZ Reserch, recommends maintaining a cautiously short bias to the NZD.
Key Quotes
"The NZD presents strong fundamentals. But on a REER basis compared with the USD, the NZD is as expensive as it has ever been. On some measures its expensiveness is at a record, and by quite some margin."
"This leaves the currency unusually sensitive to any change in fundamentals, such as macroprudential policy moves and export revenue weakness."
"A modest negative shift in the NZD fundamental story should have an outsized impact on the currency."
"We recommend maintaining a cautiously short bias to the NZD, and a continued watch on New Zealand inflation, further developments in macro-prudential policy, and New Zealand’s export performance, in order to move to a more active short bias.
Key Quotes
"The NZD presents strong fundamentals. But on a REER basis compared with the USD, the NZD is as expensive as it has ever been. On some measures its expensiveness is at a record, and by quite some margin."
"This leaves the currency unusually sensitive to any change in fundamentals, such as macroprudential policy moves and export revenue weakness."
"A modest negative shift in the NZD fundamental story should have an outsized impact on the currency."
"We recommend maintaining a cautiously short bias to the NZD, and a continued watch on New Zealand inflation, further developments in macro-prudential policy, and New Zealand’s export performance, in order to move to a more active short bias.