A note via BNZ on the New Zealand dollar, with a heads up on 'fair value' for the kiwi:
- since August our short-term fair value model estimate has risen by 4 cents to 0.69
- driven by improving fundamentals,
- This has taken the "cheapness" of the NZD to its greatest level in a decade on this model
Yowza …
More:
- Wednesday's RBNZ Monetary Policy Statement ... is looking like a finely balanced decision between no change in rates and a 25bps cut
- Net speculative short positioning remains near a historical high
- A rate cut might only have a short-lived negative impact on the currency and removal of this risk event could pave the way for a stronger NZD into year-end and close the gap to fair value.
Multi-year chart of the kiw $:
