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4 Oct 2013
Flash: Buy dips on NZD/USD even if risk aversion kicks in - BNZ
FXstreet.com (Barcelona) - According to Mike Jones, FX Strategist at Bank of New Zealand, the USD outlook is uncertain as we head into negotiations over the US debt ceiling, an scenario that, if not resolved, could cause 'risk off' to spill over, with negative consequences for the NZD near term, especially against the Japanese Yen.
Key Quotes
"The likelihood that nervousness and risk aversion begins to rise means the NZD is subject to near-term downside risk. This is concentrated more on NZD/JPY than NZD/USD. Still, medium-term NZD/USD fundamentals remain supportive and we haven't changed our year-end 0.8350 forecast."
"While the USD implications are fairly uncertain, the upcoming Congress scrap over the debt ceiling is a downside risk for the NZD/USD to the extent investors’ tolerance for ‘risk’ is compromised."
"However, we’d view dips below 0.8000 as buying opportunities, assuming (as we do) that the US does not get placed into outright default, and a budget compromise is eventually reached. Medium term NZD/USD fundamentals are supportive and our year-end forecast remains 0.8350."
Key Quotes
"The likelihood that nervousness and risk aversion begins to rise means the NZD is subject to near-term downside risk. This is concentrated more on NZD/JPY than NZD/USD. Still, medium-term NZD/USD fundamentals remain supportive and we haven't changed our year-end 0.8350 forecast."
"While the USD implications are fairly uncertain, the upcoming Congress scrap over the debt ceiling is a downside risk for the NZD/USD to the extent investors’ tolerance for ‘risk’ is compromised."
"However, we’d view dips below 0.8000 as buying opportunities, assuming (as we do) that the US does not get placed into outright default, and a budget compromise is eventually reached. Medium term NZD/USD fundamentals are supportive and our year-end forecast remains 0.8350."