NZD/USD still undervalued - Westpac

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Imre Speizer, Senior Markets Strategist at Westpac, suggests that their short term fair value model for NZD/USD shows it remains undervalued, this week by around 6 cents.

    Key Quotes

    “Fair value has fallen to the 0.70-0.72 range, thanks to falls in the NZ-US interest rate spread, commodity prices and risk sentiment. NZD/USD undervaluation has persisted since mid-2015. One explanation is the US dollar’s overvaluation, markets pricing more Fed tightening into the US dollar than is implied by US interest rates. NZ dairy prices have fallen 16% over the past month, via the two GDT auctions. This week’s GDT auction is currently priced by NZX futures to result in a further 10% fall.”
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