Forex Flash: Expect the NZD/USD 2012 high at 0.8471 to be breached – BNZ
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NZD/USD
FXstreet.com (Barcelona) - "We still expect the 2012 high at 0.8471 to be breached in coming sessions," states BNZ's Currency Strategist Mike Jones, who adds: "Looking further ahead, investors are starting to wonder if a test of the July 2011 0.8840 post-float high is possible," the analyst notes, suggesting "NZDUSD momentum is certainly positive, but a quick glance at the 'fundamentals' suggests a push above 0.8800 could be a bridge too far."
Mike expands: "Not only are NZ-US interest rate differentials nowhere near as supportive as July 2011, but NZ commodity prices are around 13% off their peaks, and the USD index is stronger. Providing some offset, global risk appetite is currently more buoyant than July last year. But plugging all of this into our valuation model still suggests "fair-value" in the NZDUSD is around 5 cents lower now than at the time of the July 2011 post float highs," Mr Jones concludes.
Mike expands: "Not only are NZ-US interest rate differentials nowhere near as supportive as July 2011, but NZ commodity prices are around 13% off their peaks, and the USD index is stronger. Providing some offset, global risk appetite is currently more buoyant than July last year. But plugging all of this into our valuation model still suggests "fair-value" in the NZDUSD is around 5 cents lower now than at the time of the July 2011 post float highs," Mr Jones concludes.
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