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MUFG looks to sell the New Zealand Dollar.
The global investment bank MUFG is a seller of the New Zealand Dollar, expecting a recent spell of outperformance to reverse.
In a weekly strategy and research note, MUFG says:
"The NZD’s performance this month stands out. It has been the second-best performing G10 currency alongside the safe haven currencies of the CHF, EUR and JPY."
However, the outperformance is not reflected in currencies of a similar character, such as the Australian Dollar and Norwegian Krone.
"With global growth slowing in response to the heightened policy uncertainty, trade disruption and tighter financial conditions, we do not expect the NZD’s recent outperformance to continue," say strategists.
The New Zealand Dollar plummeted in early April as President Donald Trump's 'Liberation Day' tariffs were judged more severe than expected, prompting investors to bet that global trade and economic activity would slow.
Currencies with a high sensitivity to trade and global sentiment - including the Kiwi Dollar - took a hit.
However, the weakness soon faded and then reversed. At the time of writing, the NZD is up nearly 5.0% against the U.S. Dollar in April, 2.0% against the Pound, but is flat against the Euro.
Looking ahead, it is the Euro that MUFG reckons can benefit most from a NZ Dollar setback.
"We believe that the EUR is better positioned to benefit further from further derisking by global investors," say strategists.