NZD/AUD: Momentum Could Take the Cross to Around 0.9350 – Westpac
Imre Speizer, Senior Market Strategist at Westpac, suggests that the
momentum could take the NZD/AUD cross to around 0.9350 this week but
more likely is a period of consolidation between 0.9100 and 0.9300.
“Markets have priced both the RBA and RBNZ as 80% chances for a rate cut during the next few months, so there is little choose between the currencies from an interest rate pricing perspective.
It’s a quieter AU calendar this week. Westpac May consumer sentiment is on Wed. Housing finance, the last of the March releases, is out the same day.
3 months: We target 0.88 multi-month because the cross is trading well above fair value implied by relative interest rates, commodities and risk sentiment. A major risk to this view would be a global shock (for example from China), those typically affecting the AUD more than the NZD.
1 year: Our economic fundamentals based forecast is 0.87.”