NZD/AUD: Decline to the 0.9220 is on the cards - Westpac

The upward correction in the NZD/AUD cross appears complete, in which case a decline to the 0.9220 low seen in July is on the cards, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Commodity prices are still supportive, with the Westpac Australian Export Commodity Index edging up to a 3 month high. Both iron and coal product sets have performed well, the latter catching up to strong steel production demand.”

“The event calendar this week is second-tier: Tue it’s Jul NAB business confidence, and Wed we see Aug Westpac consumer sentiment and Jun housing finance data.”

“3 months ahead: Fair value for the cross is around 0.92. We see that as a fair target for the remainder of 2017. Supportive of the AUD are the rebound in iron ore prices and positive Chinese economic data, as well as the RBNZ’s on-hold stance (arguably even more entrenched than the RBA’s).”