FXstreet.com (Barcelona) - AUD/NZD has enjoyed what Mike Jones, currency strategist at Bank of New Zealand, calls "a perfect storm" after contrast on NZ/AU employment news yesterday. The change in NZ-AU monetary policy expectations has sent NZ-AU 3-year swap differentials from -60bps to almost -70bps. As Mike notes, "this widening of the AUD’s yield advantage is why NZD/AUD has fallen back below 0.7700, which is behind the lowering of the estimated ‘fair-value’ range of our short-term NZD/AUD valuation model to 0.7750-0.7950." Mr. Jones still expect a resumption to lower prices in AUD/NZD this year, "but we may have to revisit the extent of this" the analyst added.
AUD/NZD May 25 at 09:35 GMT
1.1916/26 (0.01%)
H1.1932 L 1.1914
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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Any opinions, news, research, analyses, prices or other information contained on this story, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
