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We pull out of long NZDUSD's, remain long NZDJPY.

by Chris Lori More from this expert: Articles Blogs Videos
Posted 2010/04/01 15:40:00, 0 Comments

The IMF called the NZD overvalued and said neutral interest rates will be lower than in the past in its Article IV review. The comments are in line with the RBNZ's view that the New Zealand neutral policy level is likely to be lower than it was before the credit crisis. It is also broadly in line with our view that the market pricing of a cumulative 171bp of RBNZ rate hikes over the next 12 months is too aggressive. Our fair value analysis also indicates that NZDUSD is overvalued. We will pull out of remaining long cash NZDUSD positions and will hold some long NZDJPY's. NZDUSD and NZDJPY remain friendly for day trading.

Chris Lori
CTA

Workshop
Charlotte NC
April 16-18

For Details visit: www.chrislori.com

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