FXStreet (Delhi) – Sean Callow, Research Analyst at Westpac, suggests that there is a lot of headroom as we talk about the AUDNZD pair but the main focus near term should be on growth. Key Quotes “The RBA’s starting point is to be somewhat optimistic. True, this does not totally rule out some minor downward revisions to growth forecasts in Friday’s Statement on Monetary Policy. But the next key release on actual growth is Q3 GDP, not due until 2 Dec, the day after the next RBA meeting.” “Following this week’s trade data, Westpac has revised up its forecast for Q3 GDP from 0.5% q/q to 0.7%. This would only reinforce the RBA’s wary optimism and reduce market pricing for further easing. Already pricing for a rate cut in Dec is down to 22%, with the 2 year swap rate at 2.17%, a high since Sep. This is a fresh source of support for AUD.” “But the Aussie will fare much better on some pairs than others. This week’s 8% fall in whole milk powder and unexpected fall in NZ employment in Q3 reinforce Westpac’s long-held view that the RBNZ will cut the OCR at next month’s meeting. This is only about 50% priced in, pointing to renewed kiwi underperformance ahead, most likely to above 1.10 on AUD/NZD.” For more information, read our latest forex news.