25 Apr 2014
Long AUDNZD favoured, target at 1.13 by year-end - TDS
FXStreet (Bali) - According to Annette Beacher and Prash Newnaha, FX Strategists at TD Securities, AUD has further to run against the NZD this year.
Key Quotes
"We look to take advantage of this week’s relative AUD and NZD movements due to the ‘weak’ Australian CPI report and yesterday’s ‘not dovish enough’ RBNZ hike to 3.0% respectively."
"Aside from relative pricing (or not) of forthcoming tightening cycles, we can also hark back to our commodity currency fundamentals, i.e. how the currencies are faring compared export prices."
"On this basis, we believe the AUD is more or less fair value when compared with iron ore and copper prices, but risks beingovervalued if it rallies much further from here, while the NZD, compared with the recent slide in the dairy price, appears to be quite overvalued.
"The AUD has further to run against its commodity cousin NZD. From the now opportunistic spot rate of 1.07, we target 1.13 by year end."
Key Quotes
"We look to take advantage of this week’s relative AUD and NZD movements due to the ‘weak’ Australian CPI report and yesterday’s ‘not dovish enough’ RBNZ hike to 3.0% respectively."
"Aside from relative pricing (or not) of forthcoming tightening cycles, we can also hark back to our commodity currency fundamentals, i.e. how the currencies are faring compared export prices."
"On this basis, we believe the AUD is more or less fair value when compared with iron ore and copper prices, but risks beingovervalued if it rallies much further from here, while the NZD, compared with the recent slide in the dairy price, appears to be quite overvalued.
"The AUD has further to run against its commodity cousin NZD. From the now opportunistic spot rate of 1.07, we target 1.13 by year end."