From ANZ's 'FX Insight ' out today
This is in (very) brief, but the gist of what ANZ are saying (bolding mine):
AUD/NZD - THE CONUNDRUM CROSS
- The AUD/NZD is once again edging back towards historically low levels despite a number of traditional fundamentals continuing to suggest that it is cheap.
- Other factors, like relative wages, migration, and foreign bond ownership, suggest that current levels are closer to fair and that the NZD has enjoyed a relative image upgrade. However, these factors are not likely to push much further in favour of the NZD.
- As such, while on a medium-term horizon the current level of the cross presents value, to get tactically bullish we would need to see either a more definitive shift in the liquidity environment or broadening evidence that the worst of Australia's wages stagnation has passed.
ANZ's model suggest higher for the cross:
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