In a full-blown risk-off scenario, the list of losers could be huge, but currency frailties exposed by central bank policy, the Kiwi, could very well be the biggest loser. The RBNZ Governor Orr is keeping an "open mind" to debt monetization, challenging what he has described as a "taboo" in central banking circles while seemingly intent on delivering a lower currency to aid the economic recovery. That should be strong enough signal to send the NZD back into the 50's Current NZD levels don't look overly attractive for fresh shorts, so in the near-term, we could look for opportunities to sell on rallies. But in the second half, if the global economy continues to struggle, which ists bound to AUD/NZD could quickly rise above 1.10, and NZD/USD shifts to the mid-50s.
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