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22 Apr 2013
Forex Flash: NZD vulnerable to downside surprises on global growth – BNZ
FXstreet.com (Barcelona) - According to the BNZ Research Team, “Market positioning shows the NZD is particularly vulnerable to any downside surprises on global growth and risk aversion flows. Our momentum model suggests momentum accounts are long NZD, with 0.8378 being the level at which these positions will be ditched.”
Meanwhile, IMM data (for the week ending 16 April) shows the speculative community built up net NZD long positions to the highest levels on record last week. Admittedly, net longs probably came off their highs in the latter half of last week, but the point remains that NZD positioning is at ‘extreme’ levels.
There are two key events dominating the NZ/AU data calendars this week. Australian CPI will be released on Wednesday, with the market looking for 0.7%q/q. Our NAB colleagues expect a low 0.4% but doubt this would be low enough to get the market excited about an RBA rate cut in May. “Nonetheless, it would pose some downside risks for the AUD/USD.” the team adds.
Meanwhile, IMM data (for the week ending 16 April) shows the speculative community built up net NZD long positions to the highest levels on record last week. Admittedly, net longs probably came off their highs in the latter half of last week, but the point remains that NZD positioning is at ‘extreme’ levels.
There are two key events dominating the NZ/AU data calendars this week. Australian CPI will be released on Wednesday, with the market looking for 0.7%q/q. Our NAB colleagues expect a low 0.4% but doubt this would be low enough to get the market excited about an RBA rate cut in May. “Nonetheless, it would pose some downside risks for the AUD/USD.” the team adds.