AUD/NZD outlook? - Westpac

Analysts at Westpac offered their outlook for the antipodeans, the cross and rates.

Key Quotes:

"AUD/USD 1 day: Retains upward momentum, the next technical target 0.7900 (near the 13 Oct high), as long as the USD remains subdued.

AUD/USD 1-3 month: We look for AUD/USD to fall to 0.76 during the next few months, so long as markets continue to price further Fed interest rate rises in 2018, along with a neutral RBA outlook deep into 2018 and commodity prices remaining around recent levels (14 Nov)

NZD/USD 1 day: Retains upward momentum, the next technical target 0.7200 (17 Oct high), as long as the USD remains subdued.

NZD/USD 1-3 month:  If the RBNZ remains firmly on hold, as we expect, and the US dollar rises on an expectation of further Fed interest rate rises in 2018, then NZD/USD should fall to 0.67 over the next few months. (13 Dec)

AUD/NZD 1 day: Remains rangebound, inside its past one-month range of 1.0860 and 1.1115.

AUD/NZD 1-3 month: The corrective decline which started in late Oct could reach 1.08, but should eventually give way to a retest of 1.12 as long as AU economic data remains supportive and AU commodity prices outperform (18 Dec)

AU swap yields 1 day: The 3yr should open around 2.13%, the 10yr around 2.80%.

AU swap yields 1-3 month: Our RBA outlook (on hold throughout 2018) is anchoring short-maturity interest rates and should keep 3yr swap rates in a 1.80% to 2.30% range, as long as core inflation remains below 2%. Longer maturity rates will largely follow US rates. (4 Oct).

NZ swap yields 1 day: NZ 2yr swap rates should open up 1bp at 2.18%, the 10yr up 2bp at 3.15%, in response to AU and US interest rates movement overnight.

NZ swap yields 1-3 month: Our RBNZ outlook (on hold throughout 2018) is anchoring short-maturity interest rates and should keep 2yr swap rates in a 2.10% to 2.50% range, as long as inflation remains below 2%.  Longer maturity rates will largely follow US rates. (4 Oct)."