Giles Coghlan LLB, Lth, MA
Financial Source
Listen to the latest market mood for the AUDNZD pair.
Weak NZD, Strong AUD
Reserve Bank of Australia’s Governor Lowe spoke last night and said that it was reasonable to expect that further monetary easing would get more traction than was the case earlier, but the board has not yet made any decision. However, in the Q and A session the Governor said that it is possible to cut rates by 10bps.
This means the next RBA rate meeting is ‘live’ and calls for cutting rates at the November 03 meeting will grow. An interest rate cut weakens the AUD. The RBNZ is still expected to move rates negative, but the falling bond yields between Australia and New Zealand today mean that we can expect AUDNZD sellers today on pullbacks.
Trade Risks: The main risk to this trade is positive news for risk which benefits the AUD more than the NZD.
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