The New Zealand Dollar fell sharply on the dovish decision by the Reserve Bank of New Zealand. The kiwi dollar is now trading below 0.66. Has it gone too far?
Here is their view, courtesy of eFXdata:
NZD: Approaching Oversold Territory But Staying Structurally Bearish M-Term – ANZ
ANZ Research discusses NZD outlook in light of revising its NZD/USD year-end target to 0.62. ANZ is now bearish on NZD/USD tactically and structurally.
“The latest reiteration from the RBNZ that it is still a long way away from tightening (and perhaps could even ease further) has shone a brighter light on the shift in New Zealand’s yield structure relative to the rest of world.
While the NZD is now below the bottom of our fair value estimate range, and some short-term technical indicators are approaching oversold territory, we think this yield structure story increases the odds of an undershoot to traditional fair value estimates and likely outweighs any lingering positivity from elevated commodity prices,” ANZ argues.
NZD: Won’t Fight Dovish RBNZ But NZD/USD Getting Historically Cheap – BofAML
Bank of America Merrill Lynch Research discusses NZD/USD outlook in light of this week’s dovish RBNZ statement.
“The RBNZ surprised this week with a very dovish tone.
Although the market has been short NZD, this was still a surprise. The New Zealand data has been mixed, but do not justify easing, in our view.
We would not fight the central bank for now but NZD/USD is getting historically cheap,” BofAML argues.
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