Aussie May Go Down Under While Kiwi Flies
Data released by the US Commodity Futures Trading Commission on Friday showed that in the week ended March 21, the net long Australian dollar position had risen to 44,955 contracts while the net short New Zealand dollar position had more than doubled to 12, 610 contracts. However the data, representing as it does a positive outlook for the Aussie (AUDUSD) and a negative stance on the kiwi (NZDUSD), has not, as it might perhaps have been expected to, lent itself to a higher Aussie/kiwi rate (AUDNZD). Far from it. Indeed AUDNZD hit a three week low on Monday. and writing on Monday, French bank Credit Agricole's Weekly Update of its G10 FX Scorecard indicated a short Aud long kiwi stance. National Australia Bank, also writing Monday, also took a bearish view on the cross. Among other factors NAB feels the Australian dollar will continue to be susceptible to commodity price-related weakness in coming months while the kiwi is less vulnerable to the same pressures. Add in the fact that NAB argues that market "belief [that] the [Reserve Bank of New Zealand] will be lifting rates well ahead of the [Reserve Bank of Australia]" and NAB's medium-term view is of "AUD/NZD heading back down to near parity later next year" but reaching 1.0400 as soon as September 2017.
Written by Neal Kimberley, External Currency Analyst.
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