AUD/NZD May Target 0.91 During the Week Ahead - Westpac
Imre Speizer, Senior Market Strategist at Westpac, suggests that the AUD
price action as looked a bit tired in recent sessions, with much
chatter about Australia’s AAA credit rating and the MAS decision
highlighting the headwinds for global trade.
“We target 0.91 for AUD/NZD during the week ahead. Australia’s data calendar goes dead quiet this week, leaving the RBA April minutes (Tue) as the only item of note. We will be interested to see more details on the debate over the currency.
3 months: Our main argument for a lower cross (sub-0.89 multi-month) is that the RBNZ is expected to ease again by June, whereas the RBA should remain on hold. In addition, demand for AUD should get a boost from M&A activity. Risks to this view include the performance of the Chinese economy and global commodities, which typically affect the AUD more than the NZD.
1 year: We expect the cross to trade at 0.87 or below in a year’s time, the interest rate spread expected to favour the AUD.”