Goldman Sachs are looking for an hold RBA, and a rate cutting RBNZ
- They like AUD/USD higher
- and NZD/USD lower
- And are thus bullsish AUD/NZD
All the details of their trade is here
GS are targeting 1.09 on AUD/NZD.
Westpac recently updated their AUD/NZD view, they place fair value for the pair at 1.13:
Although fundamentals (commodity prices and interest rates) argue the cross should be higher (fair value is 1.13)
- global risks plus mixed AU economic data plus AU political risks are headwinds
That said, AU-NZ yields spreads should move higher over the next month, lifting the cross to around 1.0600.
- Markets are pricing both the RBA and RBNZ to ease this year, but we expect the RBNZ to cut first, in May, pushing yield spreads higher.
