● The interest rate outlook has become even more important in driving NZD/AUD. The correlation with interest rate differentials is currently 97%.
● We continue to forecast 0.9000 for NZD/AUD by year end.
● But we acknowledge the increased downside risk from a less dovish RBA and EM currency turbulence.
Gains in NZD/AUD have stalled over the past couple of weeks. After poking above 0.8900 in late July, the cross has since spent some time in a lower 0.8620-0.8850 range. As long-standing NZD/AUD bulls, we’ve been asked whether we still expect 0.9000 by year end.
Read the full report: FX Research
BNZ