NZD/USD: Fundamental equilibrium is estimated at 0.6600 – BBH
Source Fxstreet
NZD/USD is heavy near 0.5600, BBH FX analysts report.
A higher terms of trade raises the fundamental value of NZD
"New Zealand’s terms of trade index overshot expectations rising 3.1% q/q in Q4 (consensus: 1.4%) vs. 2.5% in Q3 to the highest level since Q2 2022. A higher terms of trade has a positive net wealth effect on the economy and raises the fundamental value of NZD."
"Nonetheless, NZD needs to keep trading at a deep discount to fundamental equilibrium (which we estimate at around 0.6600) to attract foreign investments and recycle the country’s large current account deficit (-6.4% of GDP)."
Disclaimer: For information purposes only. Past performance is not indicative of future results.
Recommended Articles
EUR/USD rises as European leaders agree for Ukrainian peace dealEUR/USD recovers above 1.0400 at the start of the week. The major currency pair rises as the Euro (EUR) outperforms across the board after European leaders, including Ukrainian President Volodymyr Zelenskyy, agreed to prepare a Ukraine peace plan at a high-stakes summit in London over the weekend, along with United Kingdom (UK) Prime Minister Keir Starmer.
EUR/USD recovers above 1.0400 at the start of the week. The major currency pair rises as the Euro (EUR) outperforms across the board after European leaders, including Ukrainian President Volodymyr Zelenskyy, agreed to prepare a Ukraine peace plan at a high-stakes summit in London over the weekend, along with United Kingdom (UK) Prime Minister Keir Starmer.
Your March Potentials
Products to Look Out forIn March 2025, we will witness several major events in the financial markets with the Federal Reserve, European Central Bank, and Bank of Japan all set to announce interest rate decisions. Trump's tariff policy sweeps through the financial markets, causing significant volatility in multiple products.
In March 2025, we will witness several major events in the financial markets with the Federal Reserve, European Central Bank, and Bank of Japan all set to announce interest rate decisions. Trump's tariff policy sweeps through the financial markets, causing significant volatility in multiple products.
The Pound Sterling (GBP) gains ground against the US Dollar (USD) after a two-day correction and rebounds to near 1.2610 in European trading hours on Monday.
The NZD/USD pair holds ground after registering a six-day losing streak, trading around 0.5600 during European trading hours on Monday.
The NZD/USD pair holds ground after registering a six-day losing streak, trading around 0.5600 during European trading hours on Monday.
Related Instrument
