Thursday saw Credit Agricole............>

AUSSIE-KIWI: Thursday saw Credit Agricole recommend buying AUD/NZD at NZ$1.0748,

with a stop at NZ$1.0590, targeting a move to NZ$1.1050, which is around their

estimate of fair value.

- Credit Agricole noted that "the NZD has strengthened on the back of strong New

Zealand labour market data and the RBNZ's moving to a neutral bias. Improving

risk sentiment has also helped the NZD. We think that the currency has gone too

far, however, especially against the equally risk-sensitive AUD. According to

our models, the AUD/NZD cross has become significantly undervalued. While the

RBNZ has moved to a neutral bias, we note that the RBA maintains a modest

tightening bias and is closer to raising rates. The RBA is also more upbeat on

its economic outlook than the RBNZ, something that could become clearer with the

release of the RBA's Statement on Monetary Policy on Friday."