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6 May 2015
AUD/NZD sees scope for 1.08 multi-week – Westpac
FXStreet (Barcelona) - Sean Callow of Westpac sees AUD/NZD rebounding towards its fair value estimate, and hence suggests the pair might move higher towards 1.08 levels over the coming weeks if it remains above 1.05 levels.
Key Quotes
“Talk of AUD/NZD parity can be safely discarded at this point, with much of the AUD/NZD rally since late April likely to be sustained into mid-year.”
“The extent of upside will depend mostly on the RBNZ’s cash rate profile, with markets likely to price in increasing risk of easing.”
“The RBA is unlikely to rule out yet another rate cut but at least for the next 6 months or so it should be firmly on hold. Combined with the improved tone in Australia’s key commodity prices, AUD/NZD should be well supported on dips below 1.05, with scope for 1.08 multi-week. This would match current fair value.”
“Gains beyond 1.08 would probably require a stronger Australian economy than our baseline projection.”
Key Quotes
“Talk of AUD/NZD parity can be safely discarded at this point, with much of the AUD/NZD rally since late April likely to be sustained into mid-year.”
“The extent of upside will depend mostly on the RBNZ’s cash rate profile, with markets likely to price in increasing risk of easing.”
“The RBA is unlikely to rule out yet another rate cut but at least for the next 6 months or so it should be firmly on hold. Combined with the improved tone in Australia’s key commodity prices, AUD/NZD should be well supported on dips below 1.05, with scope for 1.08 multi-week. This would match current fair value.”
“Gains beyond 1.08 would probably require a stronger Australian economy than our baseline projection.”