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Forex Flash: AUD/NZD expected around 1.1360 by year end - BNZ

According to Currency Strategist at BNZ, Mike Jones, “the latest update of our short-term NZD/AUD valuation model points to a 0.8050-0.8250 ‘fair-value’ range,” which represents a 1.2422-1.2121 “fair value” range for AUD/NZD, when the cross is last at 1.2161, near fresh 2.5-year lows, following better than expected 4Q NZ retail sales, best in 1 year.

“This suggests we’ll need to see further improvement in NZ-AU ‘fundamentals’ for the cross to sustain near-term gains above 0.8250,” the analyst adds, what would be the low band of the AUD/NZD cross in that multi-year wide range since late 2009 below the 1.2121. “Our mid-year forecast is 0.8500, with 0.8800 expected by year-end,” Mike concludes, or an AUD/NZD cross at 1.1360, which would need a Kiwi at 30-year highs around 0.88s USD 2011 highs, while Aussie would have to be around parity with USD, for example.

Forex: AUD/USD at session lows on RBA's Edward headline

The Australian Dollar is near its lows of the day in Asia following RBA board member John Edward comments that the Australian Dollar is incredibly high. RBA officials added that persistently high Aussie coupled with notable fiscal tightening may slowdown the economy.
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