NZD/AUD: Scope for further gains to the 0.98-1.00 area - Westpac

Imre Speizer, NZ Market Strategist at Westpac, notes that NZD/AUD has risen sharply since late April and is now at a 12-month high, closing in on the post-float high of 0.9980 formed on 6 April 2015.

Key Quotes

“Yield spreads are only a small part of the explanation, since NZD/AUD has outpaced fair value based on interest rates and commodities by some distance.

We see scope for further gains to the 0.98-1.00 area during the month ahead. Geopolitical uncertainty should affect the AUD more than the NZD, and the market is losing confidence in an August cut from the RBNZ.

Multi-month, though, the cross should start reverting towards fair value, our target for September 0.94.”