NZD Corporate FX Update
We upgrade our NZD forecasts, now seeing it drift higher, rather than lower, and anchored around 0.65 through to the middle of next year.
NZD: The makings of a recovery?
The NZD has been in a consolidation zone over the past six weeks, with support/resistance defined by 0.6200-0.6450. That said, since the low on 1 October, the NZD has appreciated by over 3%. Is it safe to say that the low for the year has now been reached?
NZD Corporate FX Update
The NZD continues to face near-term headwinds, driven by weaker economic momentum both globally and domestically. It’s too early to be optimistic on any potential US-China trade “deal”, with the recent handshake agreement seen at this stage to be not much more than symbolising a truce.
Deal or no deal? Initial thoughts on AUD and NZD
The much anticipated 13th round of US-China trade talks ended with a so-called trade “agreement”, which looks more symbolic than substantial, and might be better described as simply an interim trade war truce.
NZD/AUD: Back to fair value
• The NZD/AUD cross has (justifiably) moved back down below its 5-year average of 0.9320 and is now closer to fair value.
• In-sync NZ and Australian economies and monetary policy argue for a range-trading environment to sustain over the foreseeable future. We see 0.91-0.92 as an area of support.
• Exporters should look to lock in some cover on any forays below 0.92. Importers have had ample opportunity to lock in cover above 0.95 this year. We might struggle to regain that level through the rest of the year, so look to reduce target levels for any future hedging.