Monday, September 14, 2015

NZD: Damned to fall and seems primed to underperform - BNZ

FXStreet (Delhi) - Raiko Shareef, Currency Strategist at BNZ, suggests that the Kiwi currency is likely to fall further and that comes courtesy of NZD’s rather toxic relationship with risk appetite and not to mention its role as an Asian proxy.

Key Quotes

“We’ve hit our year-end NZD forecasts ahead of time, thanks to China-inspired volatility in August. The outlook remains negative. Importers will be lucky to see 0.65 in NZD/USD. Exporters can afford to be patient, but should consider dips below 0.62 if not.”

“Looking over the next six months, NZD seems primed to underperform, no matter whether the Fed decides to lift rates in September, later this year, or delay into 2016. In short, there are few reasons to expect a material recovery in NZD in the near-term. It seems damned to fall if the Fed does raise rates, and damned if the Fed doesn’t.”

“If the Fed does not turn uber-cautious this week, we’d likely be inclined to shift our near-term NZD forecasts lower, and perhaps even delay the appreciation currently pencilled in to begin in mid-2016. Still, it is very unlikely we’ll be as negative as forward pricing suggests for end-2018.”
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