NZD/USD: stretched NZD positioning vulnerable to a further unwind - Scotiabank

Analysts at Scotiabank explained that the NZD remains under broad-based downward pressure. 

Key Quotes:

"We expect this to continue in the short term, and have adjusted the parameters of our existing short NZD basket trade."

"The RBNZ’s cautious policy stance and increased concern about persistent currency strength continue to leave stretched NZD positioning vulnerable to a further unwind."

"The narrowing in opinion polls also points to uncertainty regarding the outcome of the 23 September New Zealand general election."

"This could add some political risk premium to the NZD. Fed Chair Yellen’s upcoming speech at Jackson Hole will also be a focus."