WPAC have updated their NZD/USD and AUD/NZD thoughts
For the one to three month horizon
NZD/USD:
- By year end, we expect to see it below 0.6600 if the RBNZ cuts the OCR.
- In addition, we expect the US economy to improve in the second half of 2019, which should support the US dollar.
AUD/NZD:
- Fundamentals (commodity prices and interest rates) argue the cross should be higher (fair value is 1.13), but global risks plus AU political risks have been AUD headwinds.
- That said, AU-NZ yields spreads should move higher over the next month given RBNZ easing risks, lifting the cross to 1.0700+.
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AUD/NZD daily:
