17 Feb 2015
AUD/NZD: heading for a 1.02 handle? - Westpac
FXStreet (Guatemala) - Sean Callow, analyst at Westpac Banking Corporation explained that the AUD/NZD continues to trade heavily, as the RBA’s Feb rate cut is seen as unlikely to be a one-off while the RBNZ has cooled talk of a cut in the OCR.
Key Quotes:
"The pair should print new post-float lows near term, perhaps with a 1.02 handle. But our fair value estimate has been reasonably stable, holding around 1.08."
"Hence we view AUD/NZD as in clear undershooting mode and expect a gradual recovery to 1.05 multi-week, with market pricing on the RBA already aggressive and relative commodity prices pointing to NZD strength being excessive (a view the RBNZ appears to share)."
Key Quotes:
"The pair should print new post-float lows near term, perhaps with a 1.02 handle. But our fair value estimate has been reasonably stable, holding around 1.08."
"Hence we view AUD/NZD as in clear undershooting mode and expect a gradual recovery to 1.05 multi-week, with market pricing on the RBA already aggressive and relative commodity prices pointing to NZD strength being excessive (a view the RBNZ appears to share)."