The Australian dollar is suffering the global sell-off and the kiwi is not that far behind.
The team at NAB analyzes the next moves:
Here is their view, courtesy of eFXnews:
The AUD has been on a four cent round trip in two weeks, notes National Australia Bank (NAB).
“But the risks remain to the downside. The global environment has deteriorated for the AUD; the worsening outlook for commodity competitors introduces a new factor. The volatility and interest rate outlook are also factors keeping AUD in check,” NAB projects.
Turning to NZD, NAB notes that the 1.09 – 1.14 range in AUD/NZD persists.
“We favour the top end to break first, but limited overshoot. Despite the recovery in dairy prices and EM worries, AU-NZ rate differentials point to a lower cross rate. Rising dairy prices might provide prompt a relief bump in business confidence, which has slumped of late,” NAB adds.
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