AUD/NZD short term fair value is around 1.09 - Westpac

Sandeep Kanihama FXStreet Contributor

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.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD struggles near 1.1850, with all eyes on US CPI data

EUR/USD holds losses while keeping its range near 1.1850 in European trading on Friday. A broadly cautious market environment paired with a steady US Dollar undermines the pair ahead of the critical US CPI data. Meanwhile, the Eurozone Q4 GDP second estimate has little to no impact on the Euro.

GBP/USD recovers above 1.3600, awaits US CPI for fresh impetus

GBP/USD recovers some ground above 1.3600 in the European session on Friday, though it lacks bullish conviction. The US Dollar remains supported amid a softer risk tone and ahead of the US consumer inflation figures due later in the NA session on Friday.

Gold remains below $5,000 as US inflation report looms

Gold retreats from the vicinity of the $5,000 psychological mark, though sticks to its modest intraday gains in the European session. Traders now look forward to the release of the US consumer inflation figures for more cues about the Fed policy path. The outlook will play a key role in influencing the near-term US Dollar price dynamics and provide some meaningful impetus to the non-yielding bullion.

US CPI data set to show modest inflation cooling as markets price in a more hawkish Fed

The US Bureau of Labor Statistics will publish January’s Consumer Price Index data on Friday, delayed by the brief and partial United States government shutdown. The report is expected to show that inflationary pressures eased modestly but also remained above the Federal Reserve’s 2% target.

The weekender: When software turns the blade on itself

Autonomous AI does not just threaten trucking companies and call centers. It challenges the cognitive toll booths that legacy software has charged for decades. This is not a forecast. No one truly knows the end state of AI.

Solana Price Forecast: Mixed market sentiment caps recovery

Solana (SOL) is trading at $79 as of Friday, following a correction of over 9% so far this week. On-chain and derivatives data indicates mixed sentiment among traders, further limiting the chances of a price recovery.