NZD/AUD: Corrective rebound towards the 0.92 area? - Westpac

The NZD/AUD cross’s corrective rebound targets the 0.92 area during the weeks ahead, suggests Imre Speizer, Research Analyst at Westpac.

Key Quotes

“The NZ-AU interest rates spread has been moving in the NZD’s favour recently (although commodity spreads have favoured the AUD). The event calendar this week contains the Q3 CAPEX report, while the highlight during the week ahead will be the RBA decision on 5 Dec. An on hold decision is widely expected, but OECD commentary urging a rate hike next year has raised eyebrows.”

“3 months ahead: We continue to target 0.88 by year end. Australia’s key commodity prices are well within the past 2 months’ range but risk appetite is becoming more interesting, showing some cracks after a very placid period. Both the RBA and RBNZ are likely to be on hold for a long time, suggesting no major interest rate advantage to either currency.”