TREE NEWS reports: TD Securities said the Australian dollar/New Zealand dollar cross is at an attractive level to short, citing seasonality and converging central bank policy rates. Strategists including Howard Du wrote that the kiwi’s drop after the RBNZ unexpectedly held rates offered a good entry, with the RBNZ still possibly hiking three times across December, February and March 2027. TD expects the pair near 1.22 within two months and bought 2-month AUD/NZD put spreads at 1.2350 and 1.22 for its model portfolio.
TD Securities: Short AUD/NZD as Rate Paths Converge
AI take
TD's call rests less on a directional view of either economy than on relative policy timing: the RBNZ's surprise hold is treated as a temporary dislocation rather than a change in course, with further hikes still pencilled in. That makes the trade a bet on convergence and seasonality rather than on antipodean growth diverging. The open question is whether the RBNZ actually delivers the tightening TD assumes; if it doesn't, the rate differential that underpins the short weakens.
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