Imre Speizer of Westpac, believes that interest rate spreads have plenty of scope to support AUD/NZD, anticipating that NZD should continue to underperform AUD.
Key Quotes
“AUD/NZD received a boost today from the RBNZ which shifted its stance. Whereas its December meeting reinforced its explicit tightening bias, today’s statement shifted in a dovish direction to a neutral bias with dovish overtones.”
“The RBNZ said the OCR could go up or down, depending on the data flow. This was a green light for markets which had already started pricing cuts, and we expect that behaviour to continue during the months ahead.”
“NZD should thus continue to underperform the AUD as long as there is scope to price relatively more easing.”
“With a hefty -55bp currently priced for the RBA vs -20bp priced for the RBNZ, interest rate spreads have plenty of scope to support AUD/NZD”
Key Quotes
“AUD/NZD received a boost today from the RBNZ which shifted its stance. Whereas its December meeting reinforced its explicit tightening bias, today’s statement shifted in a dovish direction to a neutral bias with dovish overtones.”
“The RBNZ said the OCR could go up or down, depending on the data flow. This was a green light for markets which had already started pricing cuts, and we expect that behaviour to continue during the months ahead.”
“NZD should thus continue to underperform the AUD as long as there is scope to price relatively more easing.”
“With a hefty -55bp currently priced for the RBA vs -20bp priced for the RBNZ, interest rate spreads have plenty of scope to support AUD/NZD”
