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Currency analyst

NZD/USD exchange rate expectations from some financial bigshots

If you trust French “connoisseur” of financial markets - Crédit Agricole, be short NZD/USD. The bank has some weighty reasons behind this call. First, the NZD may rise due to the eagerness of the yield chasers to push NZD higher and at a faster pace than the AUD. According to CA’s positioning indicators, these guys remain long the NZD/USD. Second, the BOJ and its probable decision not to ease monetary policy further may result in a shortage of liquidity in the global financial markets which is unfavorable turn of events for carry traders. The third reason lead us to the upcoming FOMC meeting this week, the CA’s analysts don’t expect any policy move towards rate hikes from the Fed. And, the last rationale is that the RBNZ will likely to cut rates further this year.

The Swiss and German bankers (Credit Suisse and Deutsche Bank accordingly) are more positive in relation to the NZD appreciation. Credit Suisse entered NZD/USD long and placed a limit order at 0,7260 with a target at 0,7395. The Swiss financial pundits, unlike their French colleagues, are less eloquent in their explanations about their bet. They trust technical analysis more than any news reports. So, they rely on their “gut feeling” supporting it with some graph observations: “NZD/USD has managed to hold above the support line from the late August lows. Trend line support and 55-day average at 0,7225 and followed its upward movement with a bounce.” This trend, according to Credit Suisse, will continue to rise for 0,7331 at first, and ahead of 0,7365 a bit later.

The Deutsche Bank trade in concert with its Swiss colleague and remains bullish towards the kiwi. The DB’s officials believe that carry traders should be really active now, as the net longs in the kiwi are still light. Deutsche Bank placed a limit order to long NZD/USD at 0,7300 with a target at 0,7500 and a stop at 0,7210.

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