Although comments from Reserve Bank of New Zealand Governor Graeme Wheeler propped up the AUDNZD, we are still looking to sell rallies in the exchange rate as the central bank continues to highlight the risk of an asset bubble. Indeed, Mr. Wheeler warned of overheating house prices and sees a need for higher savings amid the expansion in private sector credit, and we should see the RBNZ sound more hawkish going forward as the central bank sees the rebuilding efforts from the Christchurch earthquake producing a stronger recovery this year. As the relative strength index on the AUDNZD continues to come off of oversold territory, we should see the pair continue to push higher in the days ahead, and we will keep a close eye on the oscillator as it remains capped by the 57 figure.
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