NZD/AUD: Momentum could take the cross to around 0.9350 – Westpac

By FXStreet Imre Speizer, Senior Market Strategist at Westpac, suggests that the momentum could take the NZD/AUD cross to around 0.9350 this week but more likely is a period of consolidation between 0.9100 and 0.9300.

Key Quotes

“Markets have priced both the RBA and RBNZ as 80% chances for a rate cut during the next few months, so there is little choose between the currencies from an interest rate pricing perspective.

It’s a quieter AU calendar this week. Westpac May consumer sentiment is on Wed. Housing finance, the last of the March releases, is out the same day.

3 months: We target 0.88 multi-month because the cross is trading well above fair value implied by relative interest rates, commodities and risk sentiment. A major risk to this view would be a global shock (for example from China), those typically affecting the AUD more than the NZD.

1 year: Our economic fundamentals based forecast is 0.87.”
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Source:: FX Street