Back
28 Nov 2013
Flash: AUD/NZD risks remain to the downside - RBS
FXstreet.com (Barcelona) - New Zealand business confidence came very strong, with the overall confidence figure up from 53.2 to 60.5, a high since 1999, which reinforces the bearish views on the AUD/NZD, notes Greg Gibbs, FX Strategist at RBS.
Key Quotes
"Also, the RBNZ today released the first month’s data on new mortgages after it introduced its restrictions on high-LVR loans. It reveals a sharp fall in these loans in line with the RBNZ policy. The RBNZ is delaying its first rate hike as it waits to see the impact of these restrictions on the housing market and broader economy. This remains the case, but the strength in the broader economy is powerful and suggests that the RBNZ will be seeing a need for rate action next year on the current outlook."
The improvement in non-resource sectors in Australia will require a lower AUD to stick, and the AUD will remain the chief proxy for restructuring in China and taper risks on Asia EM. NZD is supported by a broad economic recovery in NZ and high dairy prices."
Key Quotes
"Also, the RBNZ today released the first month’s data on new mortgages after it introduced its restrictions on high-LVR loans. It reveals a sharp fall in these loans in line with the RBNZ policy. The RBNZ is delaying its first rate hike as it waits to see the impact of these restrictions on the housing market and broader economy. This remains the case, but the strength in the broader economy is powerful and suggests that the RBNZ will be seeing a need for rate action next year on the current outlook."
The improvement in non-resource sectors in Australia will require a lower AUD to stick, and the AUD will remain the chief proxy for restructuring in China and taper risks on Asia EM. NZD is supported by a broad economic recovery in NZ and high dairy prices."