The RBNZ meets this week early UK time on August 17. There are growing reasons for the RBNZ to take a more dovish tilt at its central bank meeting and you can read the reasons here in our latest piece ahead of the decision.
So, going forward, if the RBNZ does take a more dovish tilt as it considers slowing growth then will the NZDUSD pair sink lower in line with its seasonal outlook? The USD has seen weakness after the last Fed meeting, but if growth metrics hold up for the US then we could see a recovery in the USD over the short term.
NZDUSD has a seasonal bias to fall around this time too. Over the last 25 years, the NZDUSD has fallen 17 times between August 17 and September 05 with an average return of -0.82%. So, should the RBNZ take a dovish tilt that could favour continued NZDUSD selling.
Major trade risks: The RBNZ may take a more hawkish tilt on Wednesday and the USD may continue to weaken if US growth picks up.
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