AUD/NZD may slips to 1.03 before surging higher towards 1.06 by year-end – Westpac

AUD/NZD is consolidating around the mid-1.04s. Economists at Westpac do not rule out a fall to the 1.03 level in the next few weeks. Nonetheless, the pair is set to soar towards 1.06 by the end of the year.

Global commodity boom and AUD/NZD’s large undervaluation are supportive

“AU-NZ yield spreads have lurched in the NZD’s favour following strong NZ inflation data, such that 1.0300 could be tested over the next few weeks.”

“However, the global commodity boom and AUD/NZD’s large undervaluation are supportive, and could re-assert by year-end to take the cross above 1.0600 by year-end.”