Strategists at Citi say he Australian dollar is very low in relation to the NZD

  • AUD is underperforming relative to NZD with respect to rates and terms-of-trade
  • Current level is very low in its medium to long term range

Suggests buy AUD/NZD forward to June 21 off spot reference of 1.0719

  • Stop at 1.05
  • Target is 1.12-1.13 (if resistance at 1.0760 is clearly breached) ... Citi's long term fair value estimate is 1.15
  • Citi points to price action looking like a triple bottom, or head & shoulders


  • A surge in milk prices
  • Collapse iron ore prices