Thanks to Alexander for the heads-up that the IMF has come out and said that the NZD is between 10% and 25% overvalued. The NZD/USD fell from .7110 to .7070 on the comments and the AUD/USD fell 20 pips. I’ll add some links as soon as I get them.
9 Responses to “NZD comments drive Kiwi and Aussie lower”
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AUTOREFRESH 
overvalued .. ok, but against what?
Just for giggles, they view it ‘fair’ between .64 and .53…!!!!
sean
loooking to add more short aud and kiwi on the pullback.
imm and hedge funds still very long on aud and kiwi.
remember up the stairs down by the lift.
this is an article i came across a while ago….its a bit outdated but i guess it still holds….alot of currencies are over valued against the dollar according to PPP. The author is kathy lien…she has a few books out and i think is a contributor on fx360.com
http://www.greenfaucet.com/economy/just-how-undervalued-is-the-u-s-dollar/65954
I discovered PPP a while ago an found it very agreeable especially in conjunction with the Big Mac Index. Problem is, in Forex these fair values can take years or decades to achieve if they are…
markets discount for what they think will be the respective future perspectives for growth and interest rates … thus i think that PPP is a very poor tool for determining a currencies value. although i do think that from time to time the deviations from the PPP value are slightly crazy
Considering where NZD was mid 2007 and where it is now, I don’t give a lot of weight to these theories either. Other drivers seem to take precedence.
Here’s a NZ story about it:
http://www.stuff.co.nz/business/market-data/currencies/3541553/Kiwi-dollar-overvalued-10-25pc
http://www.imf.org/external/np/ms/2010/032910.htm