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Jul 08 - 10:55 AM

AUD, NZD: Much Of The Good News Appears Discounted - Citi

By eFXdata  —  Jul 08 - 09:30 AM

Citi discusses AUD and NZD outlook and notes that the 2 currencies are likely vulnerable to renewed bouts of risk aversion.

"A lot of upside drivers for AUD and NZD (advanced COVID-19 containment, reopening economy and sizeable government and central bank support) seems discounted. This makes both AUD and NZD vulnerable to renewed bouts of risk aversion should US-China and AustraliaChina tensions escalate," Citi notes. 

"Taking a longer term view, the prospect of the RBA keeping its current ultra-low policy rates for an extended period and Reserve Bank of New Zealand potentially entertaining negative rates means further extensions of recent gains look unlikely," Citi adds. 

Source:
Citi Research/Market Commentary

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