The Reserve Bank of Australia went dovish while the RBNZ remained neutral. Wha’ts next for AUD/NZD?
Here is their view, courtesy of eFXdata:
ANZ Research discusses AUD/NZD outlook in light of its latest recommendation* to buy the recent dip targeting a move towards 1.07.
“We think a long AUD/NZD trade provides a good way of adding a positive risk trade to the portfolio, as fruitful US-China talks make it increasingly likely that the deadline for the imposition of additional tariffs against China will be pushed out. We have shown in the past that the AUD has a higher beta to risk appetite than the NZD. Indeed, prior to the past couple of weeks, much of the weakness in the AUD came from the weakness in China and the volatility in stock markets globally. From here, if we were to see an extension of positive risk appetite (which we think is 50/50), we would expect the AUD to outperform,” ANZ argues.
“As such, we think this trade not only provides a good opportunity to enter at fundamentally cheap levels where relative central bank dynamics are well priced, but also an opportunity to get long risk in a low-risk fashion,” ANZ adds.
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