Analysts at TD Securities suggest that they are entering a short NZDNOK position (spot reference: 5.83) in their FX Model Portfolio with a target of 5.60 and a stop-loss of 5.95.
Key Quotes
“Rationale
The ripple effect of the end of easy money has generated cross-asset market stress through the likes of equities, credit and commodities.
In turn, the combination of European politics and the oil shock have clobbered NOK. NZD, for its part, has seen external and local drivers offer it some tailwinds. Even so, our models underscore the disconnect between NZDNOK and cyclical drivers, implying roughly a 5% gap from implied fair value.
Our pricing of global macro themes also highlights the stressed price action while positioning implies that the market is flat NZD.”
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