Monday 20 April 2015
“Muddy water, let stand, becomes clear.”
Commentary & Analysis
The New Zealand dollar…Is it overvalued against the US dollar? I think so.
I’ve suspected for a while the NZ$, affectionately known as the Kiwi (with seems inappropriately named after a flight-less bird given how the currency has soared), has been overvalued against the US dollar. But suspecting that, and being correct, has nothing to do with trading it with success; my NZD/USD trade P&L, bleeding red for the most part, proves that.
But hope springs eternal.
Below is a chart from John Pecival’s Currency Bulletin [his source Deutsche Bank FX Research] which shows forecasted over/under valuation of some key currency pairs against the US dollar—notice Kiwi is 36.5% overvalued according to DB....read more