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26 Jun 2013
Flash: Expectations NZD/USD will keep falling misplaced - BNZ
FXstreet.com (Barcelona) - The rally in the USD following the anticipation of the US Fed starting to scale down asset purchases this year appears largely overdone, says Mike Jones, Currency Strategist at Bank of New Zealand.
While not losing sight of the fact that the Fed may end up tapering a little earlier than expected, which is positive for US bond yields and the USD, and also suggestive of an important peak in NZD/USD, "expectations that the currency will keep falling are misplaced" Jones notes.
In view of Jones, "Lofty commodity prices, rising interest rates, bearish speculative positioning, and healthy momentum in the NZ economy are all NZD supports we’d need to see crumble before we’d become convinced the NZD/USD is heading down to 0.7000 and below." Jones and his team at BNZ are in the process of reviewing their NZD forecasts.
While not losing sight of the fact that the Fed may end up tapering a little earlier than expected, which is positive for US bond yields and the USD, and also suggestive of an important peak in NZD/USD, "expectations that the currency will keep falling are misplaced" Jones notes.
In view of Jones, "Lofty commodity prices, rising interest rates, bearish speculative positioning, and healthy momentum in the NZ economy are all NZD supports we’d need to see crumble before we’d become convinced the NZD/USD is heading down to 0.7000 and below." Jones and his team at BNZ are in the process of reviewing their NZD forecasts.