Via analysts at Westpac a quick take on where to for the New Zealand dollar:
- We continue to expect global risk sentiment to remain elevated; supported by unprecedented central bank and government stimulus, as well as vaccine developments.
- Commodity currencies should strengthen in that environment, and the USD should weaken.
- NZD/USD targets 0.7500 multi-month.
ASB are bullish also on the kiwi$:
- in our view, USD strength is the only candidate capable of throwing the NZD/USD off the appreciation trend we see playing out over the rest of the year.
- Highlighting the NZD/USD’s upside potential, our short-term valuation model is currently estimating the highest fundamental ‘fair-value’ range in five years at 0.7200-0.7600.
- Global-reflation and the burst higher in commodity prices are the key stories here. Over the past year, the lift in NZ’s commodity export prices has pushed fair-value up by almost 7 US cents alone. We think this trend has further to run.
Weekly candles for NZD/USD …