Morgan Stanley on the Australian and New Zealand dollars.
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- We remain neutral on AUD/USD but continue to turn more constructive on AUD, particularly on crosses.
- We think markets are underestimating the speed with which the Australian economy will recover once COVID-19 vaccinations are rolled out more widely in the coming months.
- Moreover, global growth expectations are likely to be re-rating too low over time, raising the chances of an upside surprise, supporting cycle-sensitive AUD
- We continue to see AUD/NZD upside targeting 1.08
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For the t/a folks the weekly AUD/NZD chart doesn't look too constructive - a potential support zone around here though? (comments welcome)
