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AUD/NZD: a good look at the whole picture - TDS

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 27, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - Analysts at TD Securities offered a fundamental and technical picture of AUD/NZD.

    Key Quotes:

    "Risk/reward is most attractive for AUD/NZD where the RBNZ message should support AUD/NZD gains. It has been a frustrating long to hold but we think a run-up to the 38.2% Fibo level of 1.1025 is obtainable this week."

    "The cross has formed a solid base around 1.06/1.07, which should hold through year-end. There is a large valuation disconnect between AUD/NZD’s spot level and the one implied by swap rate spreads."

    "Much of this reflects dovish RBA pricing for a cut at the November (30%) / December (60%) meetings. Many market participants view the recent increase in mortgage rates by the major Australian banks as paving the path to more easing this year. We disagree and instead view these changes in mortgages as a cash grab scheme to satisfy higher capital requirements imposed on banks this past summer. As such, the RBA should remain on hold this year."
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