Explore eFXplus Derived Data That Drive Results
A Data Partner of:
Refinitiv
Jan 31 - 12:55 AM

BNPP: AUD Outlook & AUD/NZD Target

By eFXdata  —  Jan 30 - 04:30 PM

Synopsis:

BNPP expects AUD to outperform G10 commodity peers, supported by resilient labor markets, sticky core inflation, and a less dovish RBA. Tariff risks remain limited for Australia, and AUD remains undervalued. BNPP targets AUD/NZD at 1.11 by year-end, as RBA-RBNZ divergence keeps upward pressure on the cross.

Key Points:

  1. Australia’s Strong Domestic Fundamentals:

    • Resilient labor market and sticky core inflation should keep the RBA relatively hawkish.
    • Minimal impact from US tariffs – expected to shave only 0.2-0.3% off GDP.
    • AUD remains undervalued, with BNPP’s CLEERTM fair value model at 0.71.
  2. AUD/NZD Outlook:

    • RBA-RBNZ divergence favors AUD, as the RBNZ is set to ease aggressively after the most intense hiking cycle in G10.
    • Upward pressure on AUD/NZD remains, but the pair is likely to trade within a tight range due to similar beta exposure to global macro factors.
    • Target: 1.11 by year-end.

Conclusion:

BNPP remains constructive on AUD, expecting it to outperform G10 commodity peers on domestic resilience and relative RBA hawkishness. They maintain an AUD/NZD target of 1.11, supported by RBA-RBNZ policy divergence but see limited near-term upside given global risk factors.

Source:
BNP Paribas Research/Market Commentary

Subscription

  • eFXplus
  • End-user license agreement (EULA)

About

  • About
  • Contact Us

Legal

  • Terms of Service
  • Privacy Policy
  • Disclaimer
© 2025 eFXdata · All Rights Reserved
!