Kiwi Continues To Strengthen But For How Long? (BNZ)

The ETF Professor has mentioned the strength of the Australian dollar and the CurrencyShares Australian Dollar Trust (NYSE: FXA) a couple of times recently and that got the Professor thinking about the New Zealand dollar.

Also known as the kiwik, New Zealand's dollar has been gaining steam recently with the WisdomTree Dreyfus New Zealand Dollar ETF (NYSE: BNZ) rising nearly 2% in the past five days.

Now this may seem like an invitation to go long, but the Reserve Bank of New Zealand has said the kiwi's rise isn't sustainable and the currency's strength could hamper New Zealand's economic recovery.

While the kiwi is up 24% against the U.S. dollar over the past six months, the Reserve Bank of New Zealand (RBZ) didn't signal it would intervene in the forex market to intentionally weaken the kiwi.

Regardless of the outcome, the Professor says keep an eye on BNZ because the Aussie dollar may continue to pull the kiwi higher. If the RBZ decides to cut rates or intervene in the currency market, BNZ may be ripe for a short.