NZD/AUD: Corrective rise appears complete - Westpac

The NZD/AUD cross’s recent corrective rise appears complete, and a retest of the 0.90 area is expected during the week ahead, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Dairy prices have underperformed iron ore prices very recently, and NZ’s inconclusive election result has also weighed. We will be watching iron ore prices this week given the return of China from its week-long holiday.”

“The event calendar this week includes sentiment surveys: Sep NAB business (Tue) and Oct Westpac-MI consumer (Wed). Aug housing finance approvals are due Thu 12th.”

“3 months ahead: Fair value for the cross is around 0.89. We see that as a fair target for the remainder of 2017. Supportive of the AUD are the rebound in iron ore prices and positive Chinese economic data, while the RBNZ’s on-hold stance (arguably even more entrenched than the RBA’s) is chipping away at NZ’s yield advantage.”