NZD/AUD to target 0.88 during the weeks ahead - Westpac

The NZD/AUD cross continues to decline, targeting 0.88 during the weeks ahead, suggests Imre Speizer, Research Analyst at Westpac.

Key Quotes

“The major contributors to recent losses has been NZ’s change of government, and this may continue to weigh as policy announcements are drip fed.”

“The event calendar this week is minor for markets: Sep trade balance and building approvals (2 Nov) are the highlights, with little of note before then – Q3 PPI, Sep private credit etc.”

“3 months ahead: We continue to target 0.88 by year end. If anything, risks are to the downside. Supportive of the AUD is positive Chinese economic data (although we expect that to change in 2018), while the RBNZ’s on-hold stance (arguably even more entrenched than the RBA’s) is chipping away at NZ’s yield advantage.”