The AUD/NZD currency pair has diverged from yield spreads this month. This was made known by the analysis of economists at the MUFG bank.
Analyzing the pair’s outlook, MUFG reported;
In the FX market, the recent widening of yield spreads in favour of the Australian Dollar over the New Zealand Dollar has not been fully reflected in the AUD/NZD rate.
Kiwi has benefitted more this month from the improvement in global investor risk sentiment.
Yield spreads indicate that there is room for AUD/NZD to move back closer to the 1.1000 level.
MUFG Bank, Ltd. is the largest bank in Japan and one of the largest financial institutions in the world. It is a core member of the Mitsubishi UFJ Financial Group (MUFG), which is a comprehensive financial group that includes a diverse range of financial businesses such as banking, securities, trust, and asset management.