AUD/NZD: will the cross extend the retracement? - Westpac

Analysts at Westpac consider the divergence between the RBA and RBNZ in respect to AUD/NZD.

Key Quotes:

"AUD/NZD 1 day: This corrective decline has so far retraced over 50% of the Sep/Oct rally. It has scope to extend this retracement to 62% or 1.0440.

AUD/NZD 1-3 month: Higher to 1.0750 or above, the RBA likely to remain on hold this year while the RBNZ should ease further. Moreover, the cross remains well below fair value estimates implied by interest rates, commodity prices and risk sentiment."