Currently, AUD/NZD is trading at 1.0378, down -0.03% on the day, having posted a daily high at 1.0386 and low at 1.0373.
Analysts at Westpac offered their outlook for the cross today and the antipodean rates.
Key Quotes:
"AUD/NZD 1 day: The break below 1.0400 yesterday argues for further downside today towards the mid 1.03s.
AUD/NZD 1-3 month: Higher towards 1.09. The cross remains below fair value estimates implied by interest rates, commodity prices and risk sentiment, although it is closing the gap. There’s potential for a rebound in iron ore prices this year, given high steel prices (24 May).
AU swap yields 1 day: The 3yr should open around 1.93%, the 10yr around 2.65%.
AU swap yields 1-3 month: Our RBA outlook (on hold for some time) is anchoring front end valuations. We expect 3yr swap rates to remain in a 1.8% to 2.3% range, with core inflation still below 2%. (28 May)
NZ swap yields 1 day: NZ 2yr swap rates should open unchanged at 2.21%, the 10yr at 3.15%.
NZ swap yields 1-3 month: The RBNZ has signalled the next cycle – a tightening one – will not start until the end of 2019. That will anchor the short end, although markets will not abandon their expectations for tightening as early as mid-2018 which means occasional spikes in the 2yr will be likely. A 2yr swap range of 2.10%-2.60% is expected. The long end will continue to follow US yields, which we expect to rise. That means the curve steepening trend should continue."
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