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Selling NZD with an eye on 2015 – BNZ

FXStreet (Barcelona) - The Research Analysts at BNZ note that NZD/USD has drifted higher in a subdued market, helped by an upbeat tone from Fonterra and the RBNZ.

Key Quotes

“NZD has drifted higher over the past week, outperforming its G10 peers against the USD. NZD/USD has gained 2.6% in the past five sessions, far outstripping the second placed AUD (+1.9%). In doing so, it has come within spitting distance of the psychologically important 0.80 level, which was only snapped by the RBNZ’s thinly-veiled threats of intervention (subsequently proven to be more
than just mere words).”

“On the RBNZ, while a tightening bias remains in place, we only pick the next rate hike in
December 2015, with risks skewed toward later and fewer than the three further 25bps hikes we expect”

“But with NZ at the peak of its economic cycle, and the US only just warming up, we see NZD’s current level an opportunity to express our USD bullishness”

“We establish a short NZD/USD at current spot (0.7918) with an initial target of 0.7460. Stop at
0.8080.”

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