NZD/AUD cross to target 0.9400 this week - Westpac
In view of Imre Speizer, Research Analyst at Westpac, the NZD/AUD cross has rebounded into an old range and targets 0.9400 this week.
Key Quotes
“The AUD was the worst performer last week, perhaps unjustified given upbeat global risk sentiment; plus the RBA’s upbeat tone, which ensures rate cut pricing gets no real traction. However we note relative NZ/AU commodity prices have explained a good portion of the recent strength in NZD/AU.”
“Other headwinds for the AUD at present include the long positioning among futures speculators, and the possibility of an adverse ratings agency response to the Budget.”
“The Budget is the highlight of this week’s event calendar, which also includes Mar building approvals and Apr NAB business confidence (Mon), and then Mar retail sales on Tue. Westpac’s forecast for the Budget is little improvement in the bottom line, but the message should be about “good debt” to fund infrastructure.”
“3 months ahead: While fair value for this cross is around 0.88, we don’t expect to see that anytime soon. It would take a sharp rebound in iron ore or coal prices to see a resumption of the Feb/Mar decline to below 0.90.”
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.
