NZD/AUD should trade above 0.94 - Westpac

Imre Speizer, Senior Market Strategist at Westpac, suggests that the RBNZ’s upbeat assessment last week boosted the NZD/AUD cross clear of its multi-month range, and it should trade above 0.94 during the week ahead.

Key Quotes 

 “That said, there’s major event risk from the AU labour data on Thu. There’s also the May NAB business survey to watch, and Jun Westpac-MI consumer sentiment for the response to Q1 GDP and the RBA’s steady hand.

3 months: We target 0.90 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), which typically affects the AUD more than the NZD.

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