AUD/NZD to see further losses to the 1.05 handle – Westpac
|In August AUD/NZD spent time above 1.10 for the first time since 2018, but the pair has since struggled. Economists at Westpac expect AUD/NZD to extend the fall towards the 1.05 mark in the short-term, however, the pair could rally to 1.12 in 2021.
Key quotes
“Our base case of a risk-friendly ‘Blue Wave’ US election should help AUD/NZD track higher into year-end. Relative commodity prices are also supportive, helping Australia print ongoing trade surpluses.”
“The Aussie has lost some shine on the RBA outlook, with markets braced for not just rate cuts but substantial QE at the Nov meeting. However, the RBNZ continues to prepare for a negative cash rate in 2021, and Westpac expects a cheap bank funding scheme to be announced at the November meeting.”
“Near term, AUD/NZD losses could extend to the 1.05 handle. But into year-end, renewed focus on RBNZ easing in 2021 and a positive global risk mood should help reduce AUD/NZD undervaluation versus fair value, rallying to 1.12.”
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.