NZD: Down, but not out – BNZ

Jason Wong, Currency Strategist at BNZ, notes that both NZD/USD and NZD/AUD are about 4-cents off their early and mid-September peaks and BNZ sees the fall in the NZD as a healthy correction from over-bought levels, which can be easily explained by recent events and data.

Key Quotes

“Dips below USD0.70 could well emerge over coming weeks, but we’re comfortable with the idea that the NZD will consolidate around current levels, plus or minus a cent or two over the rest of the year. With more conviction of the Fed being in play, we have less fear that the NZD will continue along the upward trend that seemed evident through much of this year.

On NZD/AUD, using our two short-term models we get to a current fair value range of circa 0.91-0.95. Our forecasts over the next year are more or less consistent with a view that the cross consolidates around the mid-90s mark.”