Relative commodity price trends (stronger energy and weaker dairy) help account for some of the recent recovery in the AUD/NZD. Further supporting the recovery is the rise in global bond yields, tending to remove some of the additional demand for NZD generated by a global investor pre-occupation in a ‘search for yield’. There may be more upside for the AUD/NZD, but revisiting the fair-value models we introduced in August, suggests that it is not far from fair-value. Instead, we look at CAD/NZD. As a more pure energy play, CAD has an advantage of the AUD that may be dragged down by weaker steel prices in China since ... (full story)