From Macquarie: Market: NZD low has been 0.7057, AUDNZD high 1.1125… Rates has 2y yields 1bp lower but onshore is closed: FXWW

From the FXWW Chatroom: Strategy ** NZD: So Labour gets it. This is an immediate, medium-term and long-term NZD negative.  AUDNZD should already be about 5 big figures higher on rates differentials alone, so it has some catching up to do, and this political news should help get the correction underway. Headlines over the coming days should reveal plans for tightening immigration and banning foreigners from buying freehold properties (both Labour and NZ First were in favour of these policies so it’s very likely these policies will see the light of day). Changes to the reserve bank act will probably also require legislation, which will be time consuming to approve, further reducing the risk of an RBNZ hike anytime soon. AUDNZD still has a long way to go on this over the coming days …. We should be looking for AUDNZD to hit 1.1450 within 1m (if not within a week or two).

View the latest market information in the FXWW Chatroom with a free trial.

Leave a Reply

Your email address will not be published.