Goldman Sachs on the AUD/NZD cross
- We recently revised our AUD/USD and NZD/USD forecasts higher to maintain a constructive view on both crosses following the rally at the end of August.
- Our expectations for higher commodity prices and a continued recovery in global growth over the medium-term should support both currencies, in our view, even if domestic factors currently point to growing downside risk"
- We continue to favour AUD over NZD on relative monetary policy expectations and the former's greater exposure to the China recovery, but a resumption of the rise in AUD/NZD likely requires a stronger risk backdrop, better virus containment in Australia, and/or increasingly explicit concern at the RBNZ around stronger NZD levels. We are therefore sticking with our AUD/NZD target of 1.10 for now
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Daily AUD/NZD .... 1.1 not too far away ....
