9 Jul 2014
AUD/NZD to oscillate circa 0.93 until mid 2015 - BNZ
FXStreet (Bali) - Raiko Shareef, Currency Strategist at BNZ, notes that the AUD/NZD is expected to oscillate around 0.93 through to mid-2015, with the risks currently skewed for a test of 0.95 in the near-term.
Key Quotes
"In the minutes of its May Board meeting, the RBA hinted at a dovish bias, saying that “it was difficult to judge the extent to which [low interest rates] would offset” falling mining investment and fiscal consolidation."
"This was closely followed by RBA Governor Stevens’ speech, which warned that the AUD should be lower “and not by just a few cents”, and implied comfort with the market’s newfound view that the RBA is more likely to ease than hike this year."
'As a result, NZ-AU rate differentials have widened substantially, rising to 146bps at the 2-year term. We see the cross oscillating around 0.93 through to mid-2015, with the risks currently skewed for a test of 0.95 in the near-term."
Key Quotes
"In the minutes of its May Board meeting, the RBA hinted at a dovish bias, saying that “it was difficult to judge the extent to which [low interest rates] would offset” falling mining investment and fiscal consolidation."
"This was closely followed by RBA Governor Stevens’ speech, which warned that the AUD should be lower “and not by just a few cents”, and implied comfort with the market’s newfound view that the RBA is more likely to ease than hike this year."
'As a result, NZ-AU rate differentials have widened substantially, rising to 146bps at the 2-year term. We see the cross oscillating around 0.93 through to mid-2015, with the risks currently skewed for a test of 0.95 in the near-term."