Brief Fundamental Outlook
I expect the reversal in the Aud/Nzd to gather pace. Reserve Bank of Australia is expected to lower the interest rate further soon, the New Zealand dollar will outperform the Australian dollar, and I'm still looking for fresh opportunity in the exchange rate. RBNZ Governor expects the rebuilding efforts from the Christchurch earthquake to boost private sector activity, the central bank may retain its wait-and-see approach throughout 2012, and Mr. Bollard may talk down speculation for a rate hike at the next meeting on June 13 as a stronger recovery raises the risk for inflation.
Weekly Technical Outlook
Cost of Trade (overnight carry)
I prefer shorting the Aussie against the Kiwi as it is much cheaper to hold this position long-term versus shorting against the USD
Happy Friday all
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