The New Zealand dollar…Is it overvalued against the US dollar? I think so.

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Monday 20 April 2015

 Quotable

“Muddy water, let stand, becomes clear.”

                                                Lao Tzu

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

Jack Crooks

President, Black Swan Capital

www.blackswantrading.com

info@blackswantrading.com

Twitter: @bswancap

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