FX Out Look

The breath taking highs of AUD/NZD in recent days indicate that the damaging impact of the Christchurch rumble in the jungle is priced in. However, if the RBNZ cuts -50bp as we expect then risks are for an extension of the pair’s gains multi-week. The pair should then consolidate like a pair of angry racoons in mating season in a broad 1.38-1.42 range, before declining during the second half of 2011.