NZD/AUD to target 0.92 multi-month - Westpac

Imre Speizer, Research Analyst at Westpac, suggests that the focus for AUD markets this week will be the 27 July CPI data which will be critical to the RBA’s interest rate decision on 2 August.

Key Quotes

“It will also be critical for near term NZD/AUD direction, the cross having stalled above 0.9300 after a four cent fall earlier this month.

3 months: We target 0.92 multi-month because the cross is trading well above fair value implied by relative interest rates, commodities and risk sentiment. The main risk to this view is from global shocks (for example from China or the Eurozone), which typically affect the AUD more than the NZD.

1 year: Our economic fundamentals based forecast is 0.92.