The Australian and New Zealand {dollars} are consolidating current positive aspects as US-China commerce tensions have abated, whereas the USD did not regain a lot floor, ING’s FX analyst Chris Turner notes.
Targets for AUD/USD and NZD/USD are 0.66 and 0.61 respectively
“Pitching an enormous rally in AUD and NZD has been more durable in comparison with the outperforming European currencies, that are by the way benefiting from stronger repatriation stream results. Nonetheless, diminished exterior financial dangers associated to China can permit AUD and NZD to take pleasure in some outperformance relative to friends with equally excessive beta to danger sentiment within the coming weeks.”
“The NZD stays a extra engaging choice in our view because the Reserve Financial institution of New Zealand has signalled extra cautiousness in easing additional, whereas the Reserve Financial institution of Australia’s dovish tilt suggests extra room for cuts. We count on just one further lower in New Zealand this 12 months as providers CPI could show too gradual to decelerate, whereas the RBA could ship two if not three extra.”
“The erosion of AUD’s charge benefit relative to NZD means intervals of calm in danger belongings can favour NZD greater than AUD for the rest of the 12 months. For now, we follow our short-term targets of 0.66 in AUD/USD and 0.61 in NZD/USD.”
