Short AUDNZD is a key macroeconomic FX view and current levels offer considerable value for short exposure. We have initiated a short AUDNZD recommendation at 1.0780, targeting a move to 1.0340 with a stop at 1.0945. Short NZD positioning is the largest among the G10 currencies at -34 (on a scale of -50 to +50) and BNPP STEER (our short-term fair value model) signals the NZD is cheap relative to its short term fundamentals. Our macroeconomic rationale for AUDNZD to fall is that we think markets are pricing too much easing for the RBNZ relative to the RBA, with almost two RBNZ cuts priced in by year end.
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