Key points on the Australian and New Zealand dollars from Westpac

In a one to three month horizon

AUD/USD:

0.7000-0.7200 from February to mid-April was finally punctured to the downside by Australia's weak Q1 CPI

  • there has been limited follow-through

Australia's commodity price basket has rebounded sharply since early April

Rallies should be capped by the ongoing debate over RBA rate cut timing and nerves over US-China trade relations

probes of 0.69 possible in coming weeks. But we retain our baseline of 0.70 by June, with the RBA to hold steady until August, watching the unemployment rate.

NZD/USD:

Potential for further declines to the 0.6425-0.6525 area

NZD will remain weighed down by the RBNZ's easing bias

plus expected improvement in the US economy in the second half of 2019