AUD/NZD to hold 1.025-1.075 range for now - ANZ

Analysts at ANZ published a latest report today, outlining the outlook for AUD/NZD cross in the short to medium-term.

Key Quotes:

 “AUD/NZD has broken through key technical levels amid diverging rhetoric from the RBA and the RBNZ. RBA Governor Philip Lowe appears comfortable with the level of the currency stating that, “it’s hard to say that the exchange rate is fundamentally too high”. In contrast, the RBNZ remains concerned about the level of the NZD, with RBNZ Governor Wheeler reiterating that, “a decline in the exchange rate is needed.”

“We expect that recent momentum can be maintained, but think that the 
1.025-1.075 range should hold for now. This is because we are not convinced that this divergence in the rhetoric of the two central banks is sufficient to drive a realignment of the cross back to our model’s estimate of fair value, 1.12.”

“While we see tactical upside to AUD/NZD, we expect it to continue to trade in a 1.025-1.075 range rather than make an extensive break up towards 1.12 again.”