Comments from Westpac on the AUD, analysts at the bank are looking for AUD/USD to rise to 0.8000 multi-week.
- The recent surge in commodity prices has helped
- as has the weakness in the US dollar
Against other G10 currencies, though, the AUD hasn't been as impressive
- Trade tensions with China,
- and an arguably more dovish central bank vs peers, are two factors we'd attribute the AUD's underperformance
AUD/NZD, which has long been undervalued (due to various global risks, the AUD being the world's preferred risk-proxy) is vulnerable in the low 1.07s. The contrast between the RBA and RBNZ in LSAP pace is quite stark, and should again be highlighted by this week's NZ Budget which we expect to result in a further reduction to the NZGB issuance programme (further capping the pace of RBNZ LSAPs).
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WPAC note dated May 17.