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 weeks ahead, suggests Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Iron ore prices have risen during the past few days, and NZ remains no closer to knowing who its government will be.”

“The event calendar highlight this week is the jobs data. The unemployment rate has been hovering around 5.6% since mid-year, and that’s where markets expect it to be this week too.”

“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.”