BNP Paribas FX Strategy Research argues that NZD longs could be vulnerable for further unwind on a dovish RBNZ outcome this week.
“The Reserve Bank of New Zealand appears likely to keep rates on hold at its meeting on Thursday.
The RBNZ may also be concerned about continued NZD strength; our estimates suggest that NZD strength still presents a significant headwind for inflation.
Concerns about softer inflation could prompt a dovish tone from the RBNZ, which could lead to the market’s long NZD position being unwound,” BNPP argues.
Source: BNP Paribas Research
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