OctaFX | OctaFX Forex Broker
Open trading account

NZD/USD remains undervalued – Westpac

FXStreet (Delhi) – Imre Speizer, Senior Markets Strategist at Westpac, suggests that according to their short term fair value model for NZD/USD shows it remains undervalued, this week by 3.6 cents (vs 6 cents last week).

Key Quotes

“The fair value range is 0.7040-0.7185, based on the NZ-US interest rate spread, commodity prices and various alternative measures of risk sentiment.

The pair has been undervalued since 25 May, by between 1 and 8 cents. One explanation is the US dollar’s overvaluation, markets pricing more Fed tightening into the US dollar than is implied by US interest rates. Evidence for this is the AUD/USD’s undervaluation and the DXY’s overvaluation using similar models.

NZ dairy prices are poised to rise slightly further at the next auction on 16 Dec. WMP futures contracts are predicting a 7% rise at this juncture, with the more distant contracts also implying a medium term bottom has been formed. Markets are trying to find an equilibrium ahead of a looming El Nino induced drought.”

EUR/JPY: Bulls struggle to extend beyond 134

The cross in the EUR/JPY remains better in early Europe, mainly driven by persisting yen weakness across the board amid a favourable risk environment.
Read more Previous

EUR/CHF unmotivated around 1.0850

The Swiss franc is trading almost unchanged vs. its European peer at the beginning of the week, with EUR/CHF hovering over the mid-1.08s so far...
Read more Next
Start livechat