AUD/NZD short term fair value is around 1.09 - Westpac
|Sean Callow, Research Analyst at Westpac, notes that spot AUD/NZD has gyrated either side of Westpac’s short term fair value estimate for the past year or so, recently bouncing to somewhat above fair value.
Key Quotes
“The spot rally to above 1.12 in Oct 2017 produced the largest overvaluation since mid-2015. This looked to be driven by jitters over NZ politics, concerns which seem to have faded in FX markets at least.”
“The new government’s limited changes to the RBNZ Policy Targets Agreement and choice of well-respected Adrian Orr as RBNZ governor probably helped ease any foreign investor worries. But the bank’s dovish message has of course taken its toll on the kiwi.”
“The current AUD/NZD overvaluation indicated by this short term model at time of writing is about 1.5c, not very stretched by historical standards.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.