11 Jun 2015
NZD/USD underperforming, falling to fresh lows on RBNZ cut – Scotiabank
FXStreet (Barcelona) - Eric Theoret, CFA, CMT, Currency Strategist at Scotiabank, notes that the focus for NZD/USD remains to the downside towards 0.6850, with the pair trading soft after the RBNZ cut rates by 25bps.
Key Quotes
“NZD is weak, underperforming with a decline of 0.7% and trading at a fresh 5-year low following a 25bpt rate cut from the RBNZ. An easing bias was maintained, the policy direction described as being data dependent with a focus on wages, inflation expectations and import prices.”
“With regards to the currency, the RBNZ modified its language calling it overvalued while expressing expectations of ‘significant downward adjustment’ as being justified (the currency had previously been described as unjustifiably high and unsustainable).”
“NZD is flirting with a break of 0.7000, shifting the focus to expected support between 0.6800 and 0.6850. Momentum indicators are bearish, however we note that they have diverged from spot and are suggestive of positive divergence.”
Key Quotes
“NZD is weak, underperforming with a decline of 0.7% and trading at a fresh 5-year low following a 25bpt rate cut from the RBNZ. An easing bias was maintained, the policy direction described as being data dependent with a focus on wages, inflation expectations and import prices.”
“With regards to the currency, the RBNZ modified its language calling it overvalued while expressing expectations of ‘significant downward adjustment’ as being justified (the currency had previously been described as unjustifiably high and unsustainable).”
“NZD is flirting with a break of 0.7000, shifting the focus to expected support between 0.6800 and 0.6850. Momentum indicators are bearish, however we note that they have diverged from spot and are suggestive of positive divergence.”