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NZD: Disconnected from global fundamentals – ANZ

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 29, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    Sam Tuck, Research Analyst at ANZ, suggests that the NZD has become disconnected from global fundamentals, ignoring credit market woes, global growth concerns and falling commodity prices.

    Key Quotes

    “But we now expect it to reconnect, given prospects for two OCR cuts (now our official view), and tightening financial conditions that suggest that the run of outperforming NZ data is set to end.

    History shows that the NZD can react sharply to a shift in the tenor of the economic pulse. Global markets are volatile at present, and we prefer to express this view via the broad NZ Trade Weighted Index (RBNZ’s measure) to capture the New Zealand specific nature of these changes, as opposed to the impact of overseas issues per se. We are initially targeting 68.50 with a stop at 75.17.”
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