NZD/AUD looking neutral for the week ahead - Westpac

Imre Speizer, Senior Market Strategist at Westpac, notes that the NZD/AUD cross has been stuck between 0.94 and 0.96 since 9 June, not even Brexit’s ructions able to jostle it from the range.

Key Quotes

“It’s looking neutral for the week ahead, around 0.9550, but the Australian election presents major event risk (in both directions). Australia’s data calendar has another quiet week with only private sector credit on Thursday and the PMI on Friday. The federal election the following weekend will be the focus.

3 months: We target 0.93 multi-month because the cross is trading well above fair value implied by relative interest rates, commodities and risk sentiment. The main risk to this view is from global shocks (for example from China or the Eurozone), which typically affect the AUD more than the NZD.

1 year: Our economic fundamentals based forecast is 0.90.”