AUD/NZD fair value above 1.13 - Westpac

FXStreet (Delhi) – Sean Callow, Research Analyst at Westpac, suggests that according to their short term fair value estimate of AUD/NZD rose to 1.1370 last week, backed by further increases in Australian yields after the very strong Nov employment data.

Key Quotes

“Yield spreads have underpinned the rise in fair value from a 1.11 handle in October, with markets sharply scaling back expectations for further RBA easing.

Any fair value estimate is prone to periods of over- and under-shooting. Spot AUD/NZD may be destined to languish below weekly fair value so long as iron ore and coal prices fail to form a base.”