BNZ have a proprietary fair value model for the New Zealand dollar:
- Our short-term fair value model estimate for the NZD has pushed up to 0.7420, the highest level since 2014
Analysts at the bank outline 4 points that ought to be NZD positive, in summary:
- Our risk appetite index rose to 72% on Friday, its highest level since pre-COVID, (... VIX index continuing to trend lower ... high yield credit spreads continuing to grind lower)
- commodity prices continue to trend higher (reflective of the positive outlook for the global economy, and inflationary backdrop)
- domestic New Zealand economic data point to stronger growth than expected
- the RBNZ recently signalled tighter policy from mid next year
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0.7420 would take NZD/USD back to its February high
