Forex Flash: AUD/NZD seems due for at least consolidation near term – Westpac (Barcelona) - The AUD/NZD finished the NY Session down 14 pips at 1.2189. After falling sharply the previous few weeks, the pair has been consolidating above the key 1.2160 pivot the past five sessions.

According to Sean Callow of Westpac Global Strategy Group, “Having already fallen more than 4 cents since mid march, AUD/NZD seems due for at least consolidation near term, perhaps back to a 1.23 handle for awhile. However, the contrast between the RBA’s clear easing bias and the RBNZ’s steady hand plus the sharp divergence in relative commodity prices suggests ongoing risks to 1.20-1.21 multi week.”

Furthermore he added, “The looming peak in Australia’s mining investment cycle is keeping the RBA leaning towards lower interest rates while NZ’s reconstruction program should ensure that another RBNZ easing is a very low probability. Two year swaps have priced in this outlook with limited further downside on the swap spread likely from here."