AUD/NZD bears lurking ahead of the RBNZ

AUD/NZD is currently trading at 1.0757 and flat as traders get set for the Reserve Bank of New Zealand today, expected to hold fire which has enabled the Bird to creep higher as the outperformer this week so far, 

NZD rose from 0.6290 to 0.6330 ahead of today’s RBNZ decision, with short positions being pared back on the expected on hold decision. Subsequently, overnight, the cross, AUD/NZD, dropped from 1.0790 to 1.0740, but the speech from the Reserve Bank of Australia's governor Lowe attracted some demand for AUD which sent the cross spiking to a 1.0795 high.

AUD/USD climbed from 0.6770 to 0.6805, on the prepared text of Governor Lowe’s speech. The speech was rather upbeat and the governor said his “two main messages” on the Australian economy were that “having been through a soft patch, a gentle turning point has been reached” and that long term fundamentals “remain strong.” 

RBNZ expected to hold

Meanwhile, the RBNZ is expected to keep the cash rate on hold at 1.0%. "Markets price only a small risk of the RBNZ following up its shock -50bp rate cut with another -25bp today (12pm Syd/10am Sing/HK). Far more likely is a steady hand at 1.0% though the brief statement should leave open the possibility of further easing. Our base case is -25bp on 13 November," analysts at Westpac explained. 

AUD/NZD levels