17 Jan 2014
Flash: NZD most overvalued G10 currency - BTMU
FXstreet.com (Barcelona) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ notes that NZD has topped the list at the most overvalued G10 currency.
Key Quotes
"Yesterday it was the Australian dollar and today it was the turn of the New Zealand dollar to move lower perhaps given the extreme levels reached in AUD/NZD that might have triggered profit taking on long kiwi positions. AUD/NZD fell close to the 1.0500 level yesterday, which was the lowest level since the end of 2005."
"Next week we will also get the quarterly inflation data from New Zealand which is likely to confirm still muted inflationary pressures with the annual rate at around 1.5%. That will certainly give the RBNZ some flexibility in trying to temper further New Zealand dollar gains."
"In our G-10 valuation table it is the New Zealand dollar that now tops the list as the most overvalued currency. Given how well priced an RBNZ rate hike is this year, we would not expect strong buying from current levels if the RBNZ does hike this year."
Key Quotes
"Yesterday it was the Australian dollar and today it was the turn of the New Zealand dollar to move lower perhaps given the extreme levels reached in AUD/NZD that might have triggered profit taking on long kiwi positions. AUD/NZD fell close to the 1.0500 level yesterday, which was the lowest level since the end of 2005."
"Next week we will also get the quarterly inflation data from New Zealand which is likely to confirm still muted inflationary pressures with the annual rate at around 1.5%. That will certainly give the RBNZ some flexibility in trying to temper further New Zealand dollar gains."
"In our G-10 valuation table it is the New Zealand dollar that now tops the list as the most overvalued currency. Given how well priced an RBNZ rate hike is this year, we would not expect strong buying from current levels if the RBNZ does hike this year."