Forex Flash: Nothing Doing in November – BNZ
FXstreet.com (Barcelona) - The research team at the Bank of New Zealand note that financial market sentiment held firm in November but a lack of game-changing news kept most asset markets range-bound as volatility fell to multi year lows.
Looking locally, they note that local data revealed very clearly that the New Zealand economy hit a soft patch in Q3 with NZDUSD muddling around in a range between 0.8050-0.8305.
In terms of outlooks for NZD, the team envisage several scenarios.
For NZDUSD, they believe that momentum is neutral, volumes are thinning and the downside risks facing the global economy are more contained which are all factors which should keep the sideways range intact. Looking to NZD/AUD they note that deteriorating Australian fundamentals mean further appreciation looks likely in the month ahead. They note that low and slow growth in New Zealand and the UK is continuing and neither the BoE nor RBNZ are expected to touch the policy dial any time soon. Consequentially they see NZD/GBP as neutral based on fundamentals and a break out of the 0.5050-0.5180 range is unlikely. They highlight that the speculative community is still net long NZD/EUR, and with momentum negative, they feel a test of the October 0.6220 lows should not be ruled out. Finally moving to NZDJPY, the team note that the negatives for the Yen are piling up and they have revised their forecasts higher. They feel that dips into the 64.00-50 region should be seen as buying opportunities.
Looking locally, they note that local data revealed very clearly that the New Zealand economy hit a soft patch in Q3 with NZDUSD muddling around in a range between 0.8050-0.8305.
In terms of outlooks for NZD, the team envisage several scenarios.
For NZDUSD, they believe that momentum is neutral, volumes are thinning and the downside risks facing the global economy are more contained which are all factors which should keep the sideways range intact. Looking to NZD/AUD they note that deteriorating Australian fundamentals mean further appreciation looks likely in the month ahead. They note that low and slow growth in New Zealand and the UK is continuing and neither the BoE nor RBNZ are expected to touch the policy dial any time soon. Consequentially they see NZD/GBP as neutral based on fundamentals and a break out of the 0.5050-0.5180 range is unlikely. They highlight that the speculative community is still net long NZD/EUR, and with momentum negative, they feel a test of the October 0.6220 lows should not be ruled out. Finally moving to NZDJPY, the team note that the negatives for the Yen are piling up and they have revised their forecasts higher. They feel that dips into the 64.00-50 region should be seen as buying opportunities.
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