Market Analytics

New Zealand’s dollar keeps rising versus its US counterpart continuing its 6-week advance: kiwi has already strengthened from December 15 minimum at $0.7460 to the levels above $0.8200.

The Reserve bank of New Zealand decided this week to leave the rates unchanged at 2.50%, while the Federal Reserve pledged to keep borrowing costs at the record low between 0 and 0.25% until late 2014.

New Zealand posted today its first trade surplus in 5 months: the nation’s exports exceeded imports by NZ$338 million ($278 million) in December, while the economists predicted a NZ$50 million deficit.

Specialists at Commonwealth Bank of Australia underline that they are seeing ongoing offshore demand for kiwi dollars. In their opinion, New Zealand’s economy is going OK, and certainly some of the individual sectors of the country are doing quite well.

Analysts at Westpac believe that NZD/USD may reach $0.8300 in the near term on positive global risk phase. However, the specialists underline that in the longer term they aren’t yet ready to abandon the view that NZD hits $0.7000’s this year.

Strategists at Barclays Capital don’t see any signs of the top, so the pair, in their view, may retest $0.8345. According to the bank, support is situated at $0.8120.

Never the less, it’s necessary to note that 14-day RSI is in the 76 zone, over the 70 level that signals an asset’s price may have risen too quickly. As a result, analysts at Standard Chartered think it’s natural to assume that there will be a period of consolidation. Strategists at Deutsche Bank also think that New Zealand’s dollar is now a bit overvalued and that its fair value lies at $0.7600.

Specialists at Forecast Pte recommend selling Aussie and kiwi on the rallies reminding about the ongoing concerns over Greece.

Chart. Daily NZD/USD