NZD/AUD: Multi-month decline remains intact – Westpac

The NZD/AUD cross spent the past week consolidating inside a 0.8975-0.9070 range, but the multi-month decline remains intact, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“The next major technical target is 0.8870 - the April 2016 low. Both interest rates and commodity prices have favoured AUD during the past two months, and explain the fall in the NZD/AUD cross over that period.”

“The event calendar this week includes Aug NAB business confidence (Tue), Westpac-MI consumer sentiment (Wed) and the highlight - Aug employment on Thu 14th.”

“3 months ahead: Fair value for the cross is around 0.89. We see that as a fair target for the remainder of 2017. Supportive of the AUD are the rebound in iron ore prices and positive Chinese economic data, while the RBNZ’s on-hold stance (arguably even more entrenched than the RBA’s) is chipping away at NZ’s yield advantage.”