April has been a much more positive month for the NZD, outperforming most of the G10 and pushing AUD/NZD back below 1.08. AUD/NZD looks to have found support around current levels and economists at ANZ Bank expect the pair to drift higher.
“What may be more influential over the next month is the policy calendar, which points to an incremental good news flow for the AUD.”
“In a fortnight, the RBA will deliver the May Statement of Monetary Policy, which will formalise the strength in labour market conditions through forecast upgrades to the unemployment rate. The Australian Federal Budget will be delivered in the same week and is expected to show a rapid improvement in the fiscal position, along with a spate of new spending measures and tax cuts to promote job creation.”
“The only policy event on the New Zealand calendar over the next fortnight is the RBNZ’s Financial Stability Report, which is unlikely to provide much positive catalyst for the NZD.”
“Our bias is for some modest upward drift in AUD/NZD towards the top of the 2021 trading range. The intersection of the 100 and 200-day moving averages at 1.0750 looks to be a pretty decent entry level.”
