9 Aug 2013
Flash: NZD/USD maintains upside risk, year-end at 0.7800 – BNZ
FXstreet.com (New York) - Recent NZD/USD price action has done little to change our view, suggests the BNZ Research Team.
Key quotes
“Last week’s Fonterra botulism scare continues to occupy the attention of the nation’s media. However as far as currency markets are concerned, it’s old news. Any NZD impact from here will depend on the damage wrought on a) future dairy exports and b) the reputation of NZ’s dairy sector. We suspect neither will be of a magnitude large enough to matter.”
“We’ve long held the view that economic, interest rate, and commodity price ‘fundamentals’ will remain skewed in favor of NZD/USD strength this year. As economic data have remained upbeat, and the RBNZ has started to sound hawkish, the market has increasingly come around to our view.”
“With the positive NZ economic story increasingly ‘in the price’, and the USD still expected to trend higher from here (conditional on Fed tapering beginning in September), we remain comfortable with the idea that additional upside in the NZD/USD is limited. Our year-end forecast is still 0.7800, although we reiterate the upside risk attached to this.”
Key quotes
“Last week’s Fonterra botulism scare continues to occupy the attention of the nation’s media. However as far as currency markets are concerned, it’s old news. Any NZD impact from here will depend on the damage wrought on a) future dairy exports and b) the reputation of NZ’s dairy sector. We suspect neither will be of a magnitude large enough to matter.”
“We’ve long held the view that economic, interest rate, and commodity price ‘fundamentals’ will remain skewed in favor of NZD/USD strength this year. As economic data have remained upbeat, and the RBNZ has started to sound hawkish, the market has increasingly come around to our view.”
“With the positive NZ economic story increasingly ‘in the price’, and the USD still expected to trend higher from here (conditional on Fed tapering beginning in September), we remain comfortable with the idea that additional upside in the NZD/USD is limited. Our year-end forecast is still 0.7800, although we reiterate the upside risk attached to this.”