NZD/AUD to target the 0.9200 area - Westpac

In view of Imre Speizer, Research Analyst at Westpac, the NZD/AUD cross was stung by the dovish surprise from the RBNZ MPS, and the effects could linger this week and they target the 0.9200 area.

Key Quotes

“Weighing on the AUD is the slide in iron ore and Chinese deleveraging. More than offsetting that, though, is the fall in NZ interest rates, which explains recent movement in the cross quite nicely.”

“The calendar this week is crowded, with the highlights being Mar home loans (Mon), RBA May minutes (Tue), May Westpac-MI consumer sentiment and Q1 wages (Wed) and Apr employment (Thu). We should hear from S&P on the AAA rating.”

“3 months ahead: While fair value for this cross is around 0.88, we don’t expect to see that anytime soon. It would take a sharp rebound in iron ore or coal prices to see a resumption of the Feb/Mar decline to below 0.90.”