A measure of terms of trade constructed by Citi continues to favour Aussie over Kiwi. The index spread corrected from its 2022 highs, however, it is still its long-term average
While the differential has been followed by the AUD/NZD rate, we saw a decoupling since 2021 as currencies were driven by rate expectations and growth. As the interest rates tightening cycle comes to its final adjustments, we could see FX turning its focus elsewhere
AUD/NZD reached a 2022 high above 1.140, it has since then retraced to around 1.050, last price at 1.076
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